The travel insurance industry stands on the brink of a transformative revolution fueled by artificial intelligence and machine learning. These innovative technologies present huge opportunities to optimize the customer experience and reshape how the industry operates by leveraging abundant data for custom policies, building trust and streamlining operations.
By looking at the gaps within the industry and envisioning the future, we can shed light on how AI may reshape the landscape for the benefit of insurers and, most importantly, customers.
Enhancing the customer journey through AI
Customer service lies at the heart of the insurance industry. Customers desire a seamless experience throughout their journey, from policy purchases to claims processing and payments. AI-powered technologies can streamline and automate these processes, providing customers convenience, efficiency, and peace of mind.
Travel has huge potential for transformation through AI due to the frequency with which it is purchased. An individual will buy life, car and homeowners insurance a handful of times. The same person, however, could buy travel insurance multiple times yearly. The time and cost savings of real-time claim payments, customized plans and improved customer service are multiplied tenfold when it comes to travel insurance.
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Dror Katzav, who built Atidot, an AI platform provider assisting life, annuities and health insurance companies, sees a not-so-far future in which AI leverages vast data to tailor packages based on individual needs and circumstances. AI can help insurers understand specific risk profiles, enabling personalized pricing, coverage and policy recommendations and proactively engage with them, providing a better customer journey.
For example, a traveler planning a ski trip to the Swiss Alps can leverage embedded AI to suggest coverage options for ski equipment, emergency medical coverage, evacuation due to winter sports injuries and even trip cancellation because of adverse weather conditions.
My colleague Mike Meeks, Battleface’s chief operating officer, is also excited by the prospect of AI helping customers understand complex policy documents. Using AI tools, he believes the industry can transform lengthy policy documents into user-friendly tools that provide clear and accurate responses to customer queries.
This integrated approach that leverages AI to customize the journey based on a bank of known factors and complements that with white-glove human support may be the “best practice” model currently missing in the industry today. The goal is to strike a balance where AI augments the process by delivering factual information while leaving exceptional cases and particular circumstances to human experts.
5 ways generative AI can enhance the customer journey
- Respond with immediate, accurate responses to all customer inquiries: With AI-powered technology like ChatGPT and Bard, travel insurance companies can provide far faster, more informed answers to requests, drastically reducing wait times and improving customer satisfaction. Companies can leverage a GPT-powered chatbot assistant that’s trained on the insured’s specific policy or encourage employees to use the tool to draft easy-to-understand messages or overcome language barriers. Beyond text-based models like ChatGPT and Bard, voice-based AI like Amazon’s Alexa or Google Assistant can field customer inquiries through calls, providing immediate responses.
- Simplify complex policies and improve customer comprehension: AI models like OpenAI’s Summarize can instantly help customers understand complex policy documents by breaking down the language and providing concise summaries. Data visualization AI tools can create bullet points or graphical representations of the policy terms. This fosters customer trust and improves the short- and long-term client relationship.
- Offer personalized advice to deliver a more tailored customer experience: AI recommendation systems, similar to those used by Amazon or Netflix, can analyze customers’ travel patterns and preferences to offer personalized travel insurance advice. Machine learning models can analyze customer data to predict risk factors and suggest appropriate travel insurance coverage. For example, if a customer plans a trip to a remote location with limited medical facilities, technology can suggest a comprehensive medical evacuation coverage policy. If they are a pet owner, additional and specific benefits could be offered to protect their furry friend.
- Expedite and automate the claims process: Workflow automation AI tools, like IBM’s Watson, can facilitate the easy reporting of incidents and expedite the claims process. It can classify, prioritize and automate many steps in the claims process, transforming an insurance company into a 24/7 operation instead of Monday through Friday, nine to five.
- Inform customers on claims status: AI-enabled customer relationship management systems like Salesforce can be used to keep customers updated on their claim status. These systems can integrate with other AI tools to predict processing times and potential issues, keeping customers informed at all times. They can also be trained to recognize the nature of different claims and review related documents.
The benefits of AI/ML for all travel insurance stakeholders
The potential benefits of AI and machine learning extend way beyond customers with profound implications for carriers, agencies, brokers, underwriters, third-party administrators, travel suppliers and the industry.
Advanced analytics can empower underwriters with better risk assessment tools, improving accuracy and profitability. Companies can leverage historical loss data more effectively, empowering them to improve products and rates based on real-time insights. By analyzing risks worldwide in real time, insurers can offer more accurately priced, tailored policies and benefits, enhancing the overall profitability and customer experience.
“Insurers now have access to vast amounts of data, especially companies with a broader customer base,” said Dror of Atidot. “They can harness this data to develop more efficient risk models and underwriting processes, ultimately driving better decision-making.”
AI builds trust in claims processing and underwriting
Quick claims processing builds trust and customer satisfaction, and AI can significantly improve this phase of the travel insurance life cycle. Unlike other insurance verticals like health, where consumers pay a small copay and the provider bills insurance companies directly, travelers often face the burden of paying out of pocket. They must collect numerous documents before even filing a claim for reimbursement.
With AI, insurers can streamline the claims process, automating the evaluation and approval of claims based on predefined parameters and historical data.
For example, if an airline loses a traveler’s luggage, the traveler could upload or auto-link the airline’s loss confirmation and other necessary documents. AI can then automatically verify, determine the claim amount based on the policy’s terms and conditions and initiate reimbursement, drastically reducing the waiting time.
AI will also play an important role in helping identify fraudulent claims by cross-referencing claim data with historical data and even lead to a more just insurance process. By using AI and machine learning, travel insurers can minimize the influence of biases and ensure fair treatment for all customers.
The path ahead: Embracing AI in travel insurance
We’re on the precipice of an unprecedented opportunity to reimagine the travel insurance industry and shape a customer-centric, efficient and inclusive future. Embracing AI and machine learning is no longer just a matter of technological adoption but a fundamental shift toward customer-centricity, with a win-win approach for everyone involved. The potential for AI to revolutionize the customer journey is vast, providing insurers invest in innovation, collaborate with technology partners and navigate regulatory considerations.
By placing the customer at the core of their digital transformation strategies, insurers can unlock new levels of efficiency, personalization and trust.