Will Artificial Intelligence (AI) Replace Insurance Agents?

artificial intelligence AI

When compared to other industries, insurance companies have been much slower to adopt artificial intelligence AI. Nonetheless, we are seeing more and more AI applications, such as chatbots responding to customer inquiries, data-driven policy pricing, and claims handling. Still, one of the most intriguing questions in the insurance industry is whether AI will replace insurance agents.

AI does not appear likely to replace insurance agents anytime soon. At its core, selling insurance requires human touch – building relationships, paying attention, being empathetic, and caring about feelings are all qualities that will never be replaced by artificial intelligence.

In this article, we will first look at what insurance agents can offer customers to add value. Then I’ll look into whether these abilities can be replaced by AI, whether it’s a machine, program, system, or chatbot.



What Does Artificial Intelligence Mean in Insurance?

Insurance AI entails effectively implementing advanced technology once insurers have determined where it fits in the digital insurance continuum.

AI, on the other hand, can be used to provide insurance advice, underwriting claims processing, fraud prevention, risk management, and direct marketing.

Related reading: The Top 10 best Insurance Sales Books

Customer behavior and technological advancements have paved the way for AI to create value, reduce costs, increase efficiency, and achieve higher customer satisfaction and trust in the insurance market.

Key AI Benefits in the Insurance Industry

The advantages of implementing AI in insurance appear obvious to stakeholders in this ecosystem. Indeed, 84% of French investors polled believe AI will revolutionize the insurance industry. Furthermore, 66% of insurers believe AI can improve workforce productivity.

  • Insurers can save time, cut costs, improve customer experience, and increase profitability by incorporating AI into their processes.
  • AI can also automate previously time-consuming and labor-intensive processes such as underwriting, claims management, fraud detection, and customer service.
  • AI can also help insurers reduce human errors. These mistakes are common as a result of factors such as changing the regulation of information to analyze for fraud prevention.

Understanding Artificial Intelligence in Insurance

AI brought about a revolutionary change in the insurance industry a few years ago. Insurance was traditionally associated with mountains of paperwork, lengthy meetings, complicated claims, and months of waiting for a decision.

AI in insurance has resulted in automation, which has begun to rebuild trust in insurance providers. Not only that, but insurance automation aids in the stimulation of business growth, the reduction of risks and fraud, and the automation of various business processes to reduce overall costs.

To summarize, it benefits both insurers and policyholders. Here’s how it’s done:

  • With the assistance of AI in the insurance industry, insurers become better equipped to assess risks, detect fraud, and reduce human errors.
  • AI in insurance provides better and more streamlined customer service, as well as easier and faster claim processing.
  • With AI disruption, the underwriting process can be streamlined with fewer human interventions.

Machine learning algorithms provide underwriters with more information to help them assess risk and offer better and more tailored premium pricing. Furthermore, AI in the insurance industry is streamlining the process by connecting applicants directly with carriers, making the process more efficient.

Four reasons why artificial intelligence will not replace insurance agents

Purchasing insurance can be a difficult process. And an insurance agent’s job is to match the right product to the right people.

A customer typically interacts with an insurance agent throughout the sales cycle, from providing quotes to explaining coverage to filing a claim, and so on.

Let us now examine what insurance agents have to offer and why the skills required cannot be replaced by AI.

1.Determining the customer’s requirements

Insurance agents learn about their clients’ needs by inquiring about their personal circumstances. They are familiar with various types of insurance and how they operate.

They recommend the appropriate coverage to protect their customers’ lives or property in the event of a potential loss.

Amazon uses AI to recommend products based on your preferences and what other people buy. Their artificial intelligence ensures that you always have more options than you intended to search for.

However, when shopping for insurance, you may not even be aware of the risks to which you are exposed. How can you look for something you don’t know about?

Furthermore, your insurance requirements may change as your circumstances change over time. And everyone’s circumstances are unique. When it comes to insurance, there is no such thing as a one-size-fits-all solution.

AI has been shown to outperform humans in certain tasks, such as processing large amounts of data, performing precise calculations, and performing repetitive, time-consuming tasks. Machines, on the other hand, are unable to recognize the context of any scenario.

Understanding, prediction, and experience are required to identify a customer’s protection needs. These abilities, at least for the time being, cannot be programmed or learned by AI. As a result, the answer is no.

  1. Locating the best products

Insurance agents can provide you with quotes. Furthermore, independent agents/insurance brokers (who have access to products from various carriers) will frequently get you a good deal by comparing prices and product features from various carriers.

They are knowledgeable enough to assist their clients in customizing or negotiating appropriate coverage to best meet their customers’ needs.

Insurance comparison websites are now available 24 hours a day, seven days a week. Their artificial intelligence can quote much faster than humans.

These insurance comparison websites have a wealth of information and can provide you with quotes in minutes. However, the outputs are primarily determined by price.

These websites, unlike humans, are unable to explain why pricing differences exist in relation to coverage quality, specifics of coverage, and/or differences in claim service.

Determining the best coverage requires logical reasoning on the part of a human. Sometimes conflicts must be resolved by weighing the benefits and drawbacks. Lawyers and judges use these skills in their work as well.

Machines will not be able to replace qualitative skills like this.

  1. Claims management

If you need to file a claim, your insurance agent will assist you in gathering the necessary supporting documentation and coordinating with their claims department. They can relieve your stress, especially if you are ill or have lost property or loved ones.

Insurance agents gain clients by developing relationships with them.

They are compassionate, empathetic, and detail-oriented. These are human-specific emotions that AI cannot replicate.

Some insurance companies are using artificial intelligence to automate certain parts of the claims handling process in order to reduce processing time. This will undoubtedly improve customer service.

However, explaining claims to clients may be a little more difficult. It has the potential to elicit or evolve emotions. At this point, machines cannot recognize emotion.

As a result, jobs that deal with people and require empathy, such as insurance agents, physicians, nurses, and therapists, are unlikely to be replaced anytime soon.

  1. Policy servicing and beyond

People’s situations change over time. They change jobs, purchase new vehicles, relocate to new homes, become ill, and age.

Insurance agents respond to inquiries about their clients’ current coverage. They can evaluate their insurance policies and tell them if they are getting adequate coverage.

True. Chatbots are available around the clock. They can provide basic instructions, check billing information, verify transactions, and respond to any questions based on the data they already have access to. They, however, are unable to feel.

Do people really want to learn about their health or loved ones’ coverage from a cold machine? I have my doubts.

Some people avoid discussing insurance because they believe it is too complicated or that they do not require it. This is where insurance agents can help. They establish rapport, tell stories, demonstrate concern, and offer advice in a humane manner.

Servicing necessitates a high level of human interaction. At the end of the day, you want to speak with a human about someone or something important to you. You want to be heard as well as understood. AI cannot understand your emotions.

AI’s Impact on the Future of Insurance

Implementing chatbots, NLP, and OCR is only the first step toward insurance industry automation.

To stay in business, we have been forced to adopt new technologies as a result of the pandemic. This technological revolution will undoubtedly continue. Deep learning and artificial intelligence have yet to reach their full potential. The scenarios will undoubtedly progress to machines mimicking human perception, reasoning, learning, and problem solving.

It is ┬áthat in the next decade, insurance will shift from “detect and repair” to “predict and prevent.” Users are also becoming accustomed to utilizing advanced technologies to increase productivity, lower costs, improve decision making, and increase customer satisfaction.


To be future-proof, collaborate with AI.

As consumers’ expectations shift as a result of their interactions with other industries, insurance agents will need to collaborate with AI to provide a better customer experience and remain competitive.

AI can assist insurance agents in gaining detailed insights into their customers’ demographics, behavior, interests, purchasing habits, and other data. The agent can use this information to engage customers in their context.

This provides them with more opportunities to pitch their sales in a more personalized and accurate manner. Furthermore, with AI, it can be done at scale and with speed.

Selling insurance (particularly life and health insurance) involves emotions. Relationship-building, trust-building, and social interactions are all part of it. Insurance agents are here to stay until AI can learn to feel and care.

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Will Artificial Intelligence (AI) Replace Insurance Agents?

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