How insurers can use AI to help close the coverage gap

More than four in 10 American adults (42%), or approx 102 million peoplesay they either don’t have life insurance or need more — a two-point increase from 2021, according to LIMRA.

Artificial intelligence can help bridge this gap, enabling life and annuity (L&A) insurers to reduce costs while expanding product affordability. However, just 21% of insurers say they have advanced data analytics capabilities, while only 19% use AI and machine learning, according to Capgemini.

To close the coverage gap, drive growth and improve the customer experience, it will be essential for L&A insurers to not only step up their use of AI and modernize processes, but ensure they use this technology in areas that will drive the long term growth and profitability.

Distribution transformation

Although direct-to-consumer (D2C) digital platforms have grown in popularity, more than 90% of L&A insurance it is still distributed through agents and advisers. By using AI, L&A insurers can make the product distribution process more efficient and consumer-centric without sacrificing service quality.

Efficient data collection

One of the immediate impacts of AI is the optimization of data collection and administrative tasks. Agents currently spend a significant amount of time manually gathering information and filling out paperwork. AI can ease this burden by automating data entry, assimilating and analyzing information from numerous sources, and even conducting initial customer interviews. This allows agents to focus on what they do best – providing personalized advice and building relationships with potential clients.

Improved underwriting efficiency and effectiveness

For both carriers and distributors, AI can help enable a more efficient and robust underwriting process.

On the carrier side, AI can collect data from multiple sources to help underwriters make faster, more informed decisions. For distributors, AI can help speed up these decisions while providing insights that allow them to understand the outcome of each case and improve their own screening process accordingly.

Targeted product recommendations

AI can also provide product recommendations. Instead of relying solely on an agent’s experience or intuition, AI systems can analyze large amounts of data to suggest the most relevant insurance products based on set-up and underwriting rules. This ensures that policyholders receive the right cover for their specific circumstances, based on the full range of products that insurance carriers have on the market, helping to bridge the gap between the products offered to people and what suits their needs.

Improving the customer experience

Today’s consumers expect fast, efficient and personalized services. While the insurance industry has traditionally lagged behind other industries in this field, AI has the ability to rapidly change this.

At Zinnia, I experienced this rapid transformation firsthand. Since implementing our own AI-enabled data analytics solution in the company’s call center, we have automated several repetitive administrative tasks, including call transcription and summaries, quality assurance scoring, and the process of organizing this data into a format structured and analyzable. These automations helped Zinnia better understand the types of incoming calls, leading to further operational and customer experience optimizations. In just over a year since implementation, Zinnia has seen significant improvements in both operational efficiency and customer service within the call center.

By using AI in a similar capacity, insurers can streamline operations and provide a better overall experience for its customers. This consumer-centric approach allows insurers to better understand their customers’ needs and tailor solutions accordingly, ultimately helping to close the coverage gap.

Call transparency

With AI, insurers can generate summaries and transcripts of each call in a consistent manner, helping agents stay on top of a caller’s case history in the event of a callback—allowing for smoother communication and faster problem resolution. By giving agents the details they need instantly and eliminating the need for customers to repeat their issues, this allows for a more seamless customer experience.

Management at scale

AI is also playing a vital role in expanding managerial tasks within call centers. Instead of having to manually review a sample of interactions, managers can react to AI-generated insights to identify significant trends, such as a high volume of calls related to a specific question or issue, and highlight specific areas for improvement for agencies that require attention. . This, in turn, gives managers more visibility into what is happening in the call center and allows them to refine their coaching programs and gain direct visibility into customer feedback and sentiment.

Identifying and addressing key trends

Using AI, insurers can generate data signals they weren’t able to measure before. This can help identify trends about what people call, how often their issues are resolved, and what path reps took or didn’t take to resolve the issue.

Automation

Finally, customer service automation can greatly improve accessibility. AI-powered virtual assistants can provide instant answers to frequently asked questions, even outside business hours. This automation ensures that customers receive timely support without having to spend time waiting in a call queue.

Anticipating consumer demand and generating new products

When developing new products, L&A insurers traditionally rely on experience-based analysis and the past performance of similar products. Artificial intelligence is disrupting this model by providing insurers with insights into consumer behavior, helping them anticipate demand and design products to meet policyholders’ evolving needs.

Automatic product information

AI can track how consumers interact with existing products, analyzing which features they value most and which they ignore. By continuously collecting and interpreting this data, AI can enable insurers to act more quickly when developing products.

Product generation

Beyond refining existing products, AI has the potential to automate the creation of entirely new insurance products. Through its ability to identify current trends in consumer preferences and market demand at scale, AI can quickly design products tailored to specific demographics. This automation accelerates product development, allowing insurers to launch new offerings faster and more efficiently.

Product simulation

AI can also help insurers model how a new product will work without the risk of actually bringing it to market. These predictive capabilities will enable insurers to make informed decisions about which features to include or adjust to ensure the product remains relevant in a rapidly changing market.

AI can automate administrative tasks and optimize data collection in L&A operations, giving insurers more streamlined distribution while improving the customer experience. In addition, AI can help insurers develop more relevant products through its ability to analyze consumer behavior and anticipate future demand or trends. By integrating AI solutions in these areas, insurers can reduce costs and bridge the coverage gap.