Analysis: Chatbots – Where is the love?


  • Chatbot technology is still in its infancy
  • There is a very low take up of the technology among insurers, despite it being a buzzword
  • Most innovation has come in the personal lines space
  • Insurers are having some success with customer-facing chatbots in claims and distribution
  • Some chatbot-focused insurtech firms have been forced to rethink their propositions

‘Chatbot’ has long-become an insurance industry buzzword, but penetration remains low and firms are still grappling with how to use early iterations of the technology. Elsewhere, some chatbot pilots have failed.

Just 41% of UK insurers are using live chat functionality on their websites, with only around a quarter of these powered by a chatbot, according to Acord’s annual Digital Customer Experience Study.

The UK is not alone. Lemonade’s chatbot poster-children Maya and AI Jim may have shot to fame in insurance circles and had a lawsuit brought around them, but other companies have been slow on the uptake. In spite of Lemonade’s digital agenda, Acord’s research shows that the US still lags even further behind the UK when it comes to use of the technology.

Meanwhile, in the US SME space, Munich Re-backed insurtech Next has seen its Facebook Messenger chatbot pilot flop.

Chris Newman, Acord London MD, said: “This low take-up shouldn’t be considered a big issue at the moment as we are still in the nascent days of this technology. However, it could rapidly become a problem for the insurance industry. Today’s consumers are increasingly tech-savvy and their positive online experiences with other industries have led to high expectations.

“Insurers are likely to be in the position where they are playing catch-up if they don’t start thinking now about how they can integrate chatbots into their digital offering. The longer they leave it to get started, the further behind they will be, making it that much more difficult to narrow the gap.”

The technology is still in its relative infancy. According to advocates, a big benefit of chatbots is that they learn quickly and can be reiterated on a daily basis. However, consultants are not yet convinced they are ready to make a huge impact on a heavily regulated industry where mistakes cannot be tolerated.

Oxbow partner Greg Brown said: “If you view chatbots as being defined simply as automated online or mobile things pretending to be a human enabling either sale or servicing of insurance products then at the moment they are really early days. They are evolving quite quickly, but they are not particularly great.”

Brown added: “I don’t think the technology is there yet.”

EY general insurance executive director Tony Sault said: “From a technological perspective they are still quite rudimentary and primarily based on decision trees rather than artificial intelligence. Again it’s the evolution of the technology. People are trying these out in small areas before they gain traction and deploy them into bigger parts of the business. The challenge at the moment around that is we are seeing some of these more intelligent bots in the market, but they can be quite expensive to start up, get up and running and working properly. They require a lot of training.”

Simple bots

Co-op’s pilot Facebook Messenger bot is ongoing. Its peak monthly user count since launching in August 2016 is 201, but according to the insurer it has not been promoting the bot.

In a bid to connect with millennials, it allows customers to obtain a fake motor quote if they answer four questions. Customers are then prompted to click through to the company’s website and go through the full quote process.

Despite the low user count, Co-op head of digital Chris Twigg said: “Initially this is a trial for us to test demand, because what we don’t want to do is invest lots of time and energy into creating something that people don’t want. So yes we have been pleased with the response, we’ve not promoted this heavily. We’ve had hundreds of people using this on a monthly basis.”

A hurdle for Co-op was making sure that its social media team is not inundated with people trying to use the bot. However, when accessed on a desktop it was not clearly marked and messages were instead sent to its customer service team.

Twigg added: “One thing that has been challenging for us is in the social media space we get  thousands of mentions everyday about our brand. We have a team here who are looking and responding to our social media questions. So one of our biggest challenges during the development was making sure that we didn’t flood the team with a lot of bot responses that the bot was responding to.”

Chatbots: in numbers

41% of UK insurers are using live chat functionality

Around 25% of these are powered by chatbots

Insurance chatbots are largely based on decision trees rather than true AI

201 users: Peak monthly users of Co-op’s motor Facebook Messenger chatbot

20% of PL retail customers are claiming through Zurich bot Zara

Source: Acord

Managing expectations

A major challenge for organisations looking to use chatbots is that different people and departments at insurers often have disparate ideas of what a chatbot can and should do, according to Spixii CEO Renaud Million.

Million has overseen projects with insurers including Allianz and Bupa, brokers and reinsurers to use chatbot technology in claims, customer service and distribution.

He said: “The expectations for chatbots from compliance, digital and marketing is all different within the company.”

Million added: “Some functions and capabilities of chatbots can be well accepted in other industries like food or delivery, but in insurance we are in an environment that is extremely regulated and the level of professionalism expected is really high, there is a strong level of expectation of technology. And chatbots are still a new technology.”


Insurers have seen some signs of success using basic iterations of the technology. Spixii’s latest project saw Zurich build a claims bot on its website for first notification of loss queries.

The insurer now sees 20% of its personal lines retail customers claiming through the bot, without active promotion. Its net promoter score, which measures a firm’s relationships with its customers, has risen to +78. On the back of the pilot it is now looking to use bots to provide updates when people ask about their claims and intends to look at how it can use the technology in other areas.

Customers appreciate the “flexibility” and “empathy” of the bot, according to Zurich continuous improvement and automation consultant Alex Last.

Last said: “While you can never replace the human touch, and nor should you, we always aspired to ensure our brand ethics came through in the conversation and we’re pleased that customers are positively responding to their interactions with Zara.”

Insurtechs reconsider

Some insurtech firms have learned a thorny lesson that throwing a chatbot at customers is not necessarily going to translate to an easy win unless they solve a solid problem.

A spate of digital insurance ‘personal assistants’, or ‘concierges’, have popped up in recent years. However, some such firms have realised the sheen of automated chat and policy management is not always exciting for customers, particularly where it comes to insurance. Without vast tranches of data and marketing and development cash to splash, they have adapted their models in a bid to swim rather than sink.

Most innovation in this space is in personal lines, but according to EY’s Sault there is also “a massive opportunity [for brokers] in SME”.

Alex Rainey is CEO of the no-longer-with-us Meet Mia. Mia was envisioned as a way for people to manage their insurance policies through Facebook Messenger.

However, it quickly became apparent that the service was not resonating with consumers in the longer-term. Of the roughly 600 users that tried the platform, 80 to 100 uploaded at least one policy, with a “relatively small” proportion of that returning to manage it, Rainey said.

The company chose to lose the Mia moniker. It has now rebranded as travel insurance provider Pluto.

“Having a female assistant is becoming quite cliché and not particularly progressive and quite overused,” Rainey said.

Since it switched up its proposition, the start-up has boosted its way into Zurich’s ‘innovation foundry’. It will continue to use the bot on Facebook, but as part of its travel insurance offering.

Rainey added:  “It seems relatively obvious when we look in hindsight that you don’t really interact with insurance often and the interactions you have are often negative and they are either going to be to do with claims or making a change if at all in the year. Those were things that we couldn’t support just being a management tool.”

Pluto’s research has thrown up another issue for bots hosted on external sites such as Facebook. The public is simply not used to being taken from an advert to their messenger service. This can lead to a “sharp drop off”, Rainey said.

He added: “Taking someone from a web ad to messenger app and asking them to open up an app is quite an uncommon action for people to go through. They’re much more used to buying things on the web.”

Hi Zoe

Another personal assistant, Zoe, is also undergoing changes. Zoe launched in February and has raised £400,000 in a seed round led by System-Two, but is not currently active.

When Post contacted the start-up, ex-Aviva product manager and Zoe co-founder Damian Cristian explained: “We’re currently updating our infrastructure to allow scale and getting the regulation frameworks in place to be able to sell insurance.”

The reborn Zoe will focus on locating lost policy documents for its users. The firm is now working on building algorithms to compare people’s cover with other options. It aims to allow them to make a switch within the app using insurers’ third party APIs.

It has temporarily shelved plans to have its service on Facebook Messenger and Whatsapp, but a return of the app is pencilled in for October.

Cristian said: “We are not sure exactly how we are going to do that [be available through Facebook or Whatsapp]. So on the roadmap we do not have that for the first quarter of next year, but at some point we are going to extend it. We are focusing now on building all the backend and the data structure and algorithms that will allow us to extract the data from the insurance documents.”

The insurance ‘personal assistant’

Other ‘concierge’ firms have distanced themselves from chatbots. Insurtech Brolly has forged partnerships with Axa, Ageas, LV, Markerstudy, ERV and Supercover. Users are managing millions in premiums through its app, according to the firm.

Brolly lead engineer Artyom Fedenka said: “Brolly is a personal assistant but that doesn’t mean that we are a chatbot. We see ourselves as a platform. We have an app, but have no particular attachment to any specific concept of interface. Provided we can send you suggestions and help you to manage your insurance and financial wellbeing as efficiently as possible, we’ll adapt to the best interface to achieve that.”

However, he added: “Right now, the easiest way to manage insurance is through an app interface. If tomorrow a chatbot is the best way, we’ll definitely be there.”

Other exploits

With the technology still in its relative infancy, it remains to be seen how other pockets of the industry will try to capitalise on if or when it improves. Some already have ambitious plans.

Tucked away in sleepy Sussex, Graham Hearsey and his in-house tech team at broker Professional Insurance Agents have been looking into the technology since blockchain and chatbots became industry buzzwords.

It is building “hominals” – Hearsey is quick to distance them from the term chatbot and the “cold machines” currently in use by Amazon and Google – which it aims to use high-end animation and voice recognition to make eerily human-like. It intends for them to ultimately replace the quote and buy process and oversee a policy’s life-cycle along several lines of insurance, including commercial.

Hearsey said: “I don’t believe chatbots are professional. I don’t get them. Voice recognition is really important, because we need to have that connection online through the browsers, so that people can just literally say what they want to say and get their quotes or advice.

“What we are looking for is a much more advanced creature than that.”

He added: “It sounds a little bit futuristic at the moment, but some of it is already there.”

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