The Power of Chatbots in Insurance - Interview with Spixii CEO Renaud Million

In this interview, Renaud Million CEO of Spixii shares his thoughts on customer experience, the future of chatbots, and how they reduced Zurich Insurance claims process to three working hours, from the previous targeted 24 hours.

What problem did you set out to solve when founding Spixii?

I firmly believe that insurance is wonderful as it helps society by protecting individuals and it helps the economy by protecting companies against all sort of risks.

However, the customer experience of buying and servicing insurance is stressful and frustrating leading to poor satisfaction but more importantly, low understanding of the values that insurance delivers. It creates an information asymmetry between the insurance industry and the majority of the people.

And this asymmetry cannot be solved quickly as the insurance industry is ill-equipped in terms of digital capabilities by using web-forms. On one hand, web-forms force the customer to have a digital monologue. On the other hand, one-to-one conversations cannot scale and serve a growing number of people at the same time.

This problem is then amplified by the amount of time it takes for both insurance customers and insurance companies to administrate and service insurance products. Customers end up being confused and not satisfied, so do insurance companies.

At Spixii, we believe in a different world where the customer experience and the information is delivered in a simple, efficient and personal way that helps to get more people better protected.

Where do you see the primary pains and wishes from insurance customers?

Starting with the pains, insurance customers would like to do more from the convenience of their phone or on a desktop. It might sound obvious but a lot of insurance do not have 24/7 online capabilities. If they do, these capabilities are either outdated or very limited. Customers love talking about their questions or queries related to their insurance but they don’t like the waiting time let it be before the call or during the call when operations are performed. Insurers do not like this waiting time either as no value is generated yet the costs are there.

Everyone appreciates good service and the insurance customers are not an exception. Good service doesn’t necessarily mean being passive and waiting for someone else to help but, in a digital world, it is more about being able to “self-serve” quickly and securely. Banks started a few years ago to offer this possibility to customers. So when insurance customers want to do more online, this means not only giving the right information in the right place but also having deployed the right capabilities to perform operations online. Getting a binding quote and paying with a smartphone or being able to change the policyholder details are common wishes from insurance customers across all ages.

At Spixii, we developed and iterated a framework training a machine to make insurance more human, because insurance customers demand personal and empathetic solutions. It might not seem like it but a lot of human emotions are involved when dealing with insurance.

What is Zara and how it is affecting the user experience of claims at Zurich?

Zara stands for the Zurich Automated Response Agent. The claims team of Zurich UK had one mission: to allow customers to notify Zurich of a claim efficiently, intuitively and quickly.

Zurich Insurance could only provide open office hours for their customers to report their claim, which was increasing operational costs plus time waiting on hold for customers. The team at Zurich wanted to test their customers’ appetite for a 24/7 solution for their digital native customers.

Zara works on first notification of Home and Motor claims. The day of her launch coincided with the arrival of the ‘Beast of the East’, resulting in a surge in claims. Zara was able to help customers quickly log their first notification of a claim at a time that suited them, despite the high number of calls. She gathers enough information at any hour, seven days a week, to pass onto a human handler.

Ultimately, with Zara’s support, Zurich can now process the claim within three working hours, compared to the previous targeted 24 hours. The Net Promoter Score is above 80% and based on a large amount of customers of all ages. A positive note was the enthusiastic feedback from a woman 81 years of age using Zara. Zurich UK won the 2018 British Claims Award for the Innovative Use of Technology. A case study with key results is available here.

Will chatbots replace today's mobile applications? 

From our experience, chatbots supplement other digital channels, be it a website or mobile application. I don’t think chatbots will replace mobile applications. Good applications are here to stay. Applications or services within applications which have a low performance or deliver a poor customer experience will simply be obsolete and get replaced by better services.

Chatbots, and more specifically, the speed s to build and improve them with adequate frameworkg is incomparable to mobile applications. A typical market observation for a medium size insurance player is that a mobile application or any web-based journey takes on average 10 weeks to be updated. Insurance chatbots can take from a day to a couple of weeks to be updated depending on the materiality of the change. Putting this observation into perspective, application or web-based customer journeys can be updated 5 times per year at best whereas insurance chatbots 20+ times so 4 times quicker. This is phenomenal.

Also, there is another point worth mentioning. In the case of insurance chatbots, they do more than improve the performance and customer experience of mobile applications and web-based customer journeys. For example, some insurers or brokers do not yet have a digital channel. Therefore the opportunity is even bigger. Insurance chatbots can help insurance businesses not only to scale but to leapfrog in some situations.

What part of the insurance value chain will be most impacted by chatbots?

Insurance chatbots are used by insurance customers but also by insurance companies internally. When used by insurance customers, chatbots are used to deliver quote and buy, policy servicing and claims processing.

Essentially, it means the whole value chain of insurance is impacted to some degree. Insurance chatbots are not only used by insurance customers but also by agents and brokers on behalf of their clients. Everyone is saving time to better focus on activities that generate value.

The parts of the insurance value chain which are impacted first very much depend on the strategic agenda of insurance companies as well as the alignment of a business owner with the agenda. At the end of the day, it is more than just technology. The value chain of insurance will be impacted by the willingness of insurance professionals to deliver customer-centric improvements more than simply buying and implementing new technologies.

In the market, you can see various examples of insurance chatbot failures. It was not caused by the technology itself but rather by the wrong use of it. There are plenty of insurance chatbots which never saw the light of production by working at scale but got stuck at the stage of proof of concept with unclear success criteria or strategic alignment.

When insurance chatbots are developed with a clear customer-centric pain or wish then amazing results can be expected if there is proper alignment between the business owners and the strategy. The example Zurich UK and Zara is inspiring in that respect. 

About Renaud Million

Renaud Million is the co-founder and CEO of Spixii, an award winning InsurTech company dedicated to helping more people get better protected through automated technology. He worked with EY London for six years, consulting insurance companies and building risk models while training for the British actuarial profession. Passionate about transforming the insurance industry, the move to start Spixii was a natural fit. Renaud was named Young actuarial professional of the year 2017 by Insurance ERM.

Meet Renaud at Insurtech Insights Europe 2019

Renaud will be speaking at Insurtech Insights Europe 2019 in March where he will be joined by more than 2,000 insurance entrepreneurs, executives and investors. He will be speaking about how AI might be key to customer engagement. Secure your seat here.