After many years in the insurance industry, I’ve witnessed firsthand the struggles companies face when trying to connect with their policyholders. Let’s be honest – insurance communications aren’t exactly exciting and enticing. Dense policy documents, generic renewal notices, and confusing claims procedures have been the norm for decades.
But things are changing and insurers need to be ready for the evolution.
In my role at OSG, I’ve had the privilege of seeing how AI is revolutionizing customer communications in insurance. Not as another buzzword or a gimmick, but a genuine game-changer for both insurers and their customers.
Why Traditional Communications Fall Short
It’s not uncommon to find mid-sized insurance companies that struggle to remain competitive but haven’t realized their communication strategy hasn’t evolved in the last thirty years. Customers receive haphazard generic communications, filled with legal jargon and sporadic claims updates, with no real choice on channel. This results in the insurer’s contact center flooded with calls about basic information that should be easily accessible.
Unfortunately, many insurers still treat communications as a one-way street, bombarding customers with standardized messages that often miss the mark.
Predicting What Customers Actually Want
One approach that could be particularly effective is using propensity modeling to anticipate customer behavior. As an example, let’s say there is a regional auto insurer who is struggling with late payments; rather than implementing aggressive late fees, invest in a system that identifies customers likely to miss payments before they occur.
For customers who typically pay on the 15th instead of the 1st, you can adjust reminder timing. For those who have previously expressed cash flow concerns, offer flexible payment options proactively. There’s a real power in prediction and it’s not about being creepy; it’s about being considerate.
The End of Generic Messages
True personalization goes far beyond adding someone’s name to an email. We’ve come to expect the generic three-page letter with no acknowledgement of tenure and history with the company. This breeds no loyalty whatsoever.
Now imagine a renewal that is clearly customized based on the customer’s engagement. If we use an auto renewal as an example, the company can highlight the customer’s safe driving record, include information about the mobile app features that would be most important to that customer and offer a renewal discount that is applied automatically with no phone call required.
When we talk about segmentation and hyper-personalization, this is the difference we refer to. It’s about making customers feel recognized as individuals, not policy numbers.
Delivering the Right Information When It Matters
Insurance communications often involve complex documents, policy updates, and regulatory notices. But sending too much information at once can overwhelm policyholders, leading to confusion and disengagement. This is why insurers should look to next-best messaging, which uses AI to dynamically determine what information should be prioritized based on context and customer history.
For instance, if a customer is in the middle of a claims process, AI can suppress unrelated marketing messages. The claim process is often a stressful experience and so everything else should take a backseat. Communications should focus exclusively on guiding policyholders through that process, answering their specific questions, and providing reassurance.
This is exactly how insurers can transform their customer satisfaction scores; simply by being more thoughtful about message timing and relevance.
Orchestrating Smarter, More Effective Communications
Effective customer engagement is about more than the message itself, it’s about when, where, and how it’s delivered. Using message orchestration ensures that communications are sent through the right channel at the optimal time.
For example, if a policyholder hasn’t opened an email about an important policy change, AI can automatically trigger a follow-up text message or push notification. Or, when onboarding a policyholder, message orchestration is a very effective tool to help customers complete the steps they need to in the most efficient manner, with the reminders sent at the right time based on the preferred channel.
This level of orchestration reduces noise and improves message effectiveness. The result is better engagement, fewer customer service calls and higher overall satisfaction. People appreciated not being bombarded across every possible channel.
Making Complex Processes Actually Human
Insurance terminology can be confusing, even for veterans in the industry. For the average customer, deciphering coverage details or understanding endorsements can feel like reading a foreign language.
This is where conversational AI shows its true value. We’re not referring to the dumb-bots we’ve all grown to hate, but intelligent systems that can interpret questions, provide clear explanations, and guide customers through processes step by step.
Think of a policyholder filing a claim for the first time. Instead of navigating a lengthy document or waiting on hold, they can interact with an AI-powered virtual assistant that answers questions, provides status updates, and even collects required documentation, all in a natural, conversational manner. Recently, the CIO of Allstate mentioned that they use AI to write their claims communications so they are more empathetic and less jargon-filled. That’s what makes a difference to the customer experience.
The Human Touch, Enhanced by Technology
I don’t think anyone believes AI should replace human interaction in insurance. At OSG we strongly believe that AI can enhance human connections by ensuring that every communication adds value and that human agents have the information they need to provide meaningful assistance.
The insurers that will see the greatest success are those using AI to identify when a personal touch is needed. For instance, automatically routing a call to a dedicated agent when a customer has experienced a significant life event or complex claim.
At OSG, we’re helping insurers unlock the full potential of AI to create smarter, more engaging experiences that benefit both policyholders and insurers alike. I’d love to hear your thoughts on how you’re evolving your customer communications. Feel free to reach out – after all, the best conversations go both ways.
Want to learn more about how OSG’s AI-powered solutions can transform your insurance communications? Contact us today.
