Conversational AI in insurance: A practical guide + 7 use cases

Life at an insurance agency can get overwhelming fast. One moment, you’re helping someone compare policies. The next moment, you’re juggling claim questions, renewal reminders, and a new lead who needs a quote right away. With so many conversations happening at once, even small delays can cost you business.

That’s why more agencies are exploring conversational AI. It can:

• Handle conversations 24/7
• Answer common questions
• Qualify leads
• Help schedule appointments

In this guide, we’ll explain what conversational AI is, how it works, and how it can benefit your business. You’ll also learn seven practical ways insurance teams are using it today.

What is conversational AI?

Conversational AI refers to artificial intelligence tools that can have natural conversations. Instead of clicking through menus or waiting on hold, people can interact with these tools like they would with a real person. 

Conversational AI tools are different from traditional chatbots. Older bots follow pre-written scripts and can only handle specific commands. Conversational AI is much more flexible. 

It can understand customer intent, ask follow-up questions, and guide customers through next steps. Customers can get help with common requests, like comparing policies, checking claim status, or booking time with an agent.

Think of conversational AI as an assistant that helps your agency talk to customers faster and more efficiently.

How do conversational AI tools work?

Conversational AI tools understand customer queries, figure out what they need, and respond naturally. Behind the scenes, a few key technologies make this possible:

• Speech recognition: If someone calls your agency, the AI tool turns their voice into text so it can understand the words being said.
• Natural language processing, or NLP: The AI tool analyzes the text to understand the intent. For example, it deciphers whether someone wants a quote, needs help with a claim, or has a question about coverage.
• Machine learning and large language models, or LLMs: These models help the AI tool think through the best response. They look at patterns, your knowledge base, past conversations, and any rules you’ve set.
• Text-to-speech, or TTS: Once the AI tool knows what to say, it creates a text response. If it’s a phone call, text-to-speech technology turns that response into a natural-sounding voice.

The best part is how fast all of this happens. Modern VoIP AI systems use conversational AI technologies like LLMs to sound more natural. Tools like an AI voice agent can handle conversations in real time, so customers don’t have to wait for several minutes to get a response.

7 ways the insurance industry can use conversational AI agents

Looking for some inspiration? Here are seven conversational AI use cases to explore for your business.

1. Offer 24/7 customer support

Insurance questions don’t stop at 5 PM. Customers may call you about a claim emergency, a policy quote, or a renewal at any time.  To make sure these calls are answered, you can use conversational AI for customer service.

For example, Quo’s AI agent Sona handles incoming calls around the clock. You can set it up as your primary responder or as a callback service when your team isn’t available.

Sona can also answer common questions about your insurance products and operational policies. If callers need to speak with an insurance agent, Sona transfers them to an available team member during business hours. It also takes detailed messages so your team has full context when they follow up.

With a conversational AI agent, you could also see an uptick in your policy sales. McKinsey found one insurance carrier’s 24/7 chatbot led to an 11% increase in the number of prospects who bought policies. 

2. Automate policy underwriting

What if you could issue more policies faster and with more accuracy? With conversational AI, it’s possible to do just that. Carriers are using predictive models to assess risk and automatically approve policies.

Take Lemonade as an example. Its insurance chatbots use ZestyAI’s predictive models for real-time underwriting. The system pulls location and weather data to price home insurance accurately and instantly.

As more carriers adopt AI-driven underwriting, you’ll be able to get quotes to your prospects faster and close deals sooner.

3. Qualify new policyholders for agents

When leads call in, someone has to qualify them for the right policy. But the more time your team spends on initial qualification, the less time they have to manage more complex issues. 

Conversational AI virtual assistants like Sona can handle initial lead qualification for you. Sona can understand customer intent and gauge which insurance products someone’s looking for. For instance, if a caller wants a home insurance quote, Sona can ask about their property type, coverage needs, and timeline.

Sona also asks follow-up questions based on each caller’s unique policy details. It adjusts to the flow of the conversation as it gathers information. That way, your human agents get qualified leads with full context and can focus on closing deals.

4. Handle claims processing

Your customers expect a smooth claims experience. But the reality is they have to explain what happened multiple times, submit documents, and wait for updates. It can be frustrating for them and time-consuming for your team.

A conversational AI agent makes this easier. Customers share claim information over the phone, and the AI agent accurately logs everything. It also answers basic questions and tells customers what documents they need.

One example of the benefits of conversational AI for claims processing comes from Compensa Poland. The insurance firm uses a self-service claims solution that handles claims from intake to settlement. The AI-based system led to a 73% increase in claims process cost efficiency. And 50% of customers said they’d recommend it to a friend or family member.

With faster claims handling, you can significantly improve your customer experience and free up hours for your team.

5. Provide AI-powered fraud detection

Fraudulent insurance claims cost the industry billions every year. Catching them manually is slow and inconsistent. Turns out, conversational AI agents can help with this, too.

Some AI systems use computer vision to review photos and videos submitted by policyholders. They check for signs of manipulation, flag duplicate images, and cross-reference data with claim history. Suspicious claims get sent to your team for review.

A real-world example of this is Lemonade’s selfie video feature. The AI chatbot asks claimants to record themselves explaining the nature of their claim. It then uses facial recognition to make sure the same person isn’t making multiple claims under different identities.

With AI doing the heavy lifting, more scammers are caught, and legitimate claims are processed faster.

6. Provide self-service appointment booking for policy renewals

Policy renewals often require a conversation with an agent. But scheduling that call shouldn’t mean waiting on hold or playing phone tag.

A conversational AI platform can streamline this ‌process. If a caller wants to book an appointment with your team, AI agents can automatically send them your team’s calendar. Callers can then find an available time and book it with your team.  

For example, Sona can send your team’s calendar link to customers with the Send SMS action.. When a caller asks to book a renewal appointment, Sona can text them a scheduling link while they’re still on the call. Sona also collects verbal consent from customers so that they’re comfortable receiving texts from you. 

Here’s a quick look at how the Send SMS action works in Sona:

7. Identify call trends to improve team performance

You probably don’t have time to listen to every call. But without that visibility, you miss patterns. Which issues keep coming up? Where do reps struggle? What’s driving most of your call volume?

Quo’s AI call tags help you answer these questions. They automatically label calls based on conversation context right after you hang up. Tags can help you flag call drivers, spot recurring issues, and identify potential opportunities.

Once calls are tagged, you can filter them by tag, teammate, or date. You can also filter by rep to find coachable moments. And if you use Sona, you can see how callers respond and adjust its instructions.

As Brandon Ingram, Sales & Operations Manager at Environment Control, puts it: “Call tags have been a game-changer for efficiency! They’ve made it super easy to sort through calls and quickly identify important conversations. This has significantly sped up my workflow. I also appreciate how they improve communication with my team by providing clear context for each call.“

Benefits of conversational AI for insurance

Conversational AI helps insurance teams support customers without stretching everyone thin. Here are a few of the biggest benefits:

1. Improve customer satisfaction: With conversational AI, your customers can get quick help with quotes, claims, renewals, coverage questions, and more. As a result, you’re more likely to improve their overall experience interacting with your business.
2. Increase operational efficiency: With conversational AI bots, your existing team of agents can serve more policyholders in less time. By automating repetitive tasks, you can free up your team to focus on more complex customer needs. You also don’t have to increase your headcount to grow your business.
3. Highly scalable operations: Conversational AI solutions help you scale without hiring a full team of new agents. It can handle multiple conversations at once and process requests instantly. These solutions can even serve customers during seasonal spikes or unexpected surges in demand.
4. Grow customer retention: When customers can get help at any time and consistently have positive customer interactions, they’re more likely to remain with your business. Conversational AI can serve your customers 24/7, helping you boost your customer engagement.

Move faster using AI with Quo 

Quo helps insurance agencies automate routine tasks with conversational AI. Instead of juggling calls, texts, and voicemails across different tools, you can manage everything in one place.

With Quo, you get features built for the way insurance agencies work:

• Sona, our AI voice agent, can answer calls 24/7, qualify leads, collect claim details, and help schedule appointments.
• Shared inboxes help your team stay organized across phone calls, texts, and internal threads.
• Automatic call recording helps you track every customer detail and any disputes that arise.
• AI call summaries and transcriptions help you review calls faster and share call updates with your team.
• AI call tags surface trends like call drivers, negative sentiment, and policy questions, so you know exactly where to improve.
• Seamless integrations with 8,000+ tools keep your customer data and workflows in sync. 

Together, these tools help your team deliver a better experience at every step of the customer journey.See how conversational AI can transform your business. Try Sona and Quo for free today.

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