How Digital Transformation is Advancing the Insurance Industry in 2023 

June 27, 2023

5 min read

Katherine Kopp


The three-year pandemic, followed by a mind-blowing “GPT-themed” spring of 2023, drove the digitalisation of the entire world to new heights. Interestingly, the insurance sector seems to have been affected the most by advances in natural language processing and conversational models. In this post, we’ll look at use cases of conversational AI in the insurance industry gaining new momentum in 2023 and explore a new revolutionary application of Generative AI in enterprise settings that has been holding everyone’s attention.


What are the emerging potentials for AI in insurance in 2023? 


Supercharging claims processing 

One of the most notable impacts of digital transformation and AI in the insurance industry is the optimization of claims management and processing. Insurer claims processing is a critical function and has long been dominated by manual work, resulting in increased costs and inefficiency. According to Deloitte, claims processing takes up to 70% of an insurer’s expenses. Automation of claim processing has emerged as a game-changing innovation of the decade. 


More and more carriers are taking advantage of conversational AI for claim filing to eliminate inefficiency, reduce manual labour and costs. Now instead of having to wait on hold or navigate through a confusing automated phone system, customers can simply speak to an insurance voice bot and get the help they need. Voice bots can ask customers specific questions about their claims, such as the date of the incident and the type of damage and can use this information to start the process. Thus, BNP Paribas Cardif, the global insurance leader operating in 33 countries, streamlined claim processing with the first call resolution (FCR) rising to 83% and saved $9m+ in operational costs over two years after implementation of a voice bot Cardi.  



Virtual AI assistant in the insurance industry
Customers can easily file claims through voicebots by Tovie AI


Driving extraordinary customer engagement 

While the use of bots in the insurance sector is not a new phenomenon, those that have been used thus far have mostly been non-AI, rule-based bots that simply answer common questions. This year, we are witnessing a continuing transition from these basic bots to fully-fledged digital assistants that can leverage customer profile data and history to tailor responses and actions to each customer’s specific needs. 


Personalisation has become the name of the game and AI chatbots are becoming more than just a cost-saving solution for insurance companies According to Gartner research, insurers define customer experience as a success factor and nearly 60% of insurance executives report increased spending in digital innovation for improved customer engagement, a trend that could remain until 2025. Thus, GEICO, an auto insurance company, has developed an intuitive and easy-to-use virtual assistant that helps the company’s prospects and customers with insurance and policy questions. It starts conversations and provides the necessary information helping the company turn prospects into paying customers. 


The new generation of smart chatbots provide immediate assistance and personalise the customer experience. For example, if a customer has a history of filing claims for car accidents, the chatbot can provide them with information about car insurance policies and accident prevention tips. 



AI in the insurance industry proving personalised assistance
Virtual AI assistants powered by Tovie are available 24×7


Empowering employees with knowledge 

Apart from customer engagement solutions for insurance, 2023 brings other advances. This year Generative AI innovations revealed the potential for a radical transformation of business data querying. Enterprises can now use large language models to facilitate what we call “chatting with data.” What this means is that businesses can deploy custom ChatGPT-like search bots tailored to their specific internal needs to enable document search.  


The growing interest in document search bots among insurers and other big players can be explained mainly because of its apparent benefits. These bots understand company-specific data and terminologies and provide accurate and relevant responses. Employees can ask questions and get information in a conversational format from across different data sources spread across the business. That could be anything from a PowerPoint to a Word document to an Excel file.  


Coveo’s study found that the average employee spends 3.6 hours daily searching for information — one hour more than last year’s report. The frustration caused by not being able to find information easily contributes to burnout, but thanks to the new solution of generative AI for business this risk can now be significantly reduced.   



AI in the insurance industry facilitating natural language search
Natural language search across all data types and sources with a custom ChatGPT for document search

What are emerging concerns with AI in insurance in 2023? 


Digital innovations of AI in the insurance industry allow organisations to be more effective and efficient in the ways they interact with customers and corporate data. Yet, as with any innovation, the opportunities presented by evolving AI come hand in hand with new and growing concerns. Keep reading as we will address the most common ones. 


Output unpredictability 


How do companies actually use AI large language models in such a way that they control the output and don’t get what’s called a “black box effect” discussed in one of the Forbes publications? Particularly if these models are used in a customer-facing setting, where compliance is paramount, and we want to ensure there are no reputational risks. The answer is to deploy LLMs configured with restrictive context output. This will make the behaviour of your language model more predictable and avoid liability issues. 




The use of conversational and generative AI in the insurance industry also raises important ethical concerns, including the potential for bias, and the need for transparency and accountability. “How do we ensure that AI implementations are ethical?” “How do we take action to mitigate ethical risks?” and other burning questions were answered in the latest publication of Harvard Business Review on ethical considerations of using AI. But the golden nugget piece here is that to ensure that these technologies are used for the greater good within insurance organisations, companies must partner with providers that promote ethical considerations and responsible development and have an AI code of ethics in place. 


Data privacy 


Generative AI tools can pose risks to data privacy in several ways such as data breaches and unauthorised data sharing. Insurance companies possess personal customer information and must ensure its security. Therefore, they are hesitant to implement tools that cannot safeguard digital privacy and throw data out into third party APIs. The solution to this is to deploy Generative AI on-premise with a provider that ensures compliance with PII, GDPR, and internal policies, for example, through validation with IBM cloud for Financial Services.   


And finally, Joshua Kaiser, CEO at Tovie AI, answers the question that has lately been on everyone’s mind, “Are bots going to completely replace humans in the workplace?”  

“Although there is concern that bots may replace humans, AI is simply a tool to help humans improve their work. For instance, AI-powered bots can help insurance debt collectors deal with the emotional challenges of collection calls. In addition, consumers who are embarrassed to discuss their debts with others prefer to speak with a robot rather than a person. This way, AI can reduce emotional strain for both the agent and the customer, streamline experiences, and improve call centre efficiency. However, human decision-making and compliance with regulations will always be necessary.” 


Flip to the better side – Leverage the power of NLP and AI in a safe controlled environment with Tovie 


The above and other concerns were addressed by Joshua Kaiser during his presentation at CAI Summit in London in May 2023 where our team introduced a new solution for deploying generative large language models in the enterprise setting.  



Joshua Kaiser presenting a new LLM on-premise solution by Tovie AI at CAI Summit in London in May 2023


The solution is built around the needs of enterprise grade organisations, including insurance companies, and has all the necessary in-built features to prevent risks associated with using open source tools like ChatGPT: 



  • Full output control  
  • On-premise deployment  
  • Regulations compliance 
  • Reliable performance  


Now enterprises, including brokers and insurance firms, can safely embrace a digital future powered by AI, stay ahead and remain competitive in their sector. Ultimately, in the age when customer and employee satisfaction is a differentiator between success and failure, implementing AI is essential to plan and develop strategies to ensure prosperity in the long run.  


Finally, conversational and generative AI are a driving force for the future of insurance and as the technology continues to evolve, we can expect to see even more innovative uses of Generative AI in the insurance industry in the future. Stay tuned to see how AI will continue to revolutionise the insurance industry in our future articles. 


| At Tovie AI, we specialise in developing cutting-edge Conversational and Generative AI solutions to help businesses transform and succeed in the digital age. Contact us to learn more about how we can help your insurance company leverage the power of AI to drive customer engagement and employee efficiency.



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