'AI agents' to sell insurance policies in 2022
Insurers to evolve into ‘integrated service provider’
By Nam Hyun-woo
Artificial intelligence (AI)-based chatbots could be selling insurance policies by 2022, according to a new report.
Kim Seog-young, director of the Financial Policy Department at the Korea Insurance Research Institute, said insurance firms’ AI-based marketing will “gradually replace the current channel of human insurance agents.”
“The surge of AI in the insurance field will solve the problems of the decreasing number of insurance brokers and increasing costs for them,” Kim said in his report at a breakfast meeting of insurance firm CEOs on Tuesday.
“The competition between insurers so far has been swayed by the number of affiliated agents each company has. However, the existing marketing channel is expected to be converted into a high-functioning sales workforce providing services like financial planning and healthcare, thus accelerating the competition over products and services.”
Kim compared AI with affiliated agents and general agents (GAs), who are individuals or insurance agencies that represent multiple insurers.
Kim assessed that affiliated agents and GAs are good at understanding consumer needs and explaining complex insurance policies, but the costs are burdensome. On the other hand, AI will have the same strengths while costs will be low because it can handle almost an infinite number of customers at the same time.
Insurers here are already using AI technology, though it is in its infancy. Last November, life insurance company LINA Korea launched a chatbot service, a first for the Korean insurance industry. Clients can ask questions through the Kakao Talk mobile messenger service and the chatbot suggests multiple answers.
Globally, IBM’s cognitive technology Watson is taking the lead. Japan’s Fukoku Mutual Life will replace 34 employees with its Watson-based AI system that can read data, including medical certificates, and calculate payouts to policyholders.
The company estimates it will be able to cut 140 million yen ($1.24 million) from its payroll and recoup the 200 million yen it spent on Watson in two years.
In his study, Kim also predicted that insurers will expand their services to healthcare and enhance their relationship with hospitals.
Insurers recently started providing healthcare services. They give wearable smart devices to policyholders and offer discounts on insurance fees if the clients meet certain health-related standards.
In August 2015, China’s ZhongAn Insurance and Xiaomi introduced a policy for the latter’s Mi Band users. The policy extends the insurance period or cuts fees depending on how much the policyholder walks. Metlife China introduced in September last year a policy that offers discounts to Mi Band users who sleep more than seven hours a day.
“With the surge of the so-called ‘insurtech,’ clients will purchase policies involving healthcare and daily life management through the AI channel,” Kim said. “This will spark insurers’ evolution into an integrated service firm providing healthcare and daily life management.”