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The role of AI in enhancing claims experience for Insurance customers

4 minutes, 21 seconds read

Insurance customers are most vulnerable when they file a claim. Be it life or general insurance, claims are filed in distress. This is also a critical moment for Insurers. The claims experience they deliver determines customer loyalty, which also influences referral customers in the long run. In the Insurance industry, where products and pricing among the competitors are almost the same, customer experience becomes the main differentiator. 

However, the catch is — we live in a multimodal world, which is an amalgamation of different generations and their unique preferences. Thus, Insurers need to comply with the capricious demands of different sets of policyholders. How?

AI can enhance the overall claims experience for your customers through faster and automated claims support, and multichannel integration. Let’s delve deeper into the details. 

AI in claims management cycle

According to the State of AI in Insurance report, 74% of the Insurance leaders believe that the adoption of AI is most prominent for claims processing; followed by underwriting & risk management (48%), fraud prevention (39%), and customer and agent onboarding (22%).

AI has the potential to deliver a zero-touch integrated claims experience from the first notice of loss to the final settlement. 

Source: The State of AI in Insurance 2020

Delivering faster and integrated claims experience requires redesigning the entire claims journey from the customers’ point of view; where each touchpoint requires seamless digital interactions across the entire claims management cycle. It also involves optimizing back and front-office processes with intelligent automation. 

Typically, claims experience for customers starts with the first notice of loss and involves certain stages for final settlement. Mckinsey reveals that nearly 80% of claims filed are manually reviewed by adjusters. The four main milestones in the claims settlement journey (as illustrated in the diagram above) include — first notice of loss, loss assessment, fulfillment, and settlement. AI can enhance customer experience at each of these stages. 

  • First Notice of Loss: Here, the loss has occurred. The customer is already devastated. Making help available as quickly as possible and in the easiest possible way, Insurers can ensure a healthy experience in an otherwise panicking situation. AI technologies like NLP chatbots, voice-assisted services, and digital claims recording can help in providing instant support. Also with machine learning-based fraud detection algorithms, Insurers can prevent fraud and further resources involved in assessment and fulfillment at the very beginning. 
  • Loss assessment has been a cause of delays in traditional insurance claims processes. Because, Insurers used to manually check damages, optimum repair costs, and then finally calculate the settlement amount. The longer it takes for loss assessment, the higher the brand value declines for the customer. With automated triage & claims inspection and remote inspection & evaluation, loss assessment can be made in a near-real-time.
  • During the fulfillment process, AI can help insurers with automated claims validation and digital supplier management.
  • Immediate settlement is what customers seek. With settlement automation and an automated accounting system, Insurers can provide instant settlement. For instance, Lemonade, a peer-to-peer insurance provider is able to settle claims in less than a minute!

Suggested read — 

AI can enhance claims experience in multichannel Insurance models

Insurers have to deal with a broad spectrum of customers. There are Maturists — the technology non-users, then Boomers — who have just now started using technology, Millennials — the digital immigrants, and Gen Z — the digital natives. 

These different sets of customers not only have different policy preferences but also the choice of platform they use. For instance, Maturists still rely on face-to-face communication with customer representatives to address their claims concerns. Whereas, Millennials want every resolution at the tip of their fingers. 

The proliferation of communication channels has complicated Insurance carriers’ expertise in delivering experiences. But, the generation gap will always remain. Accenture’s recent study reveals that nearly 89% of customers use at least one digital channel to interact with their brand. Surprisingly, only 13% of customers say — the digital and physical experiences are aligned. Therefore, the best approach is to adopt a technology that binds well with the requirements of the past, present, and future. 

AI and Machine Learning technologies make it possible to implement omnichannel and multichannel strategies at scale. However, there’s a fine line between omnichannel and multichannel communication models. Given the above case of different customer demographics, let’s confine to the benefits of AI in multichannel integrations.

  • AI technology enables Insures to precisely understand different personas, policy preferences and customer journeys.
  • Based on customer personas AI can augment the Insurance adjusters, claims managers, and other stakeholders’ knowledge about the claimants and their current situation. Thus, allowing them to address the circumstances with empathy.
  • By capitalizing on the insights obtained through AI, Insurance decision-makers can redesign their IT infrastructure to scale customer experiences.

The crux

In the future, AI will play a crucial role in the completely automated end-to-end claims settlement process. This will bring a two-fold advantage — Insurers will be able to free human resources to provide emotional support to the customers. And, with the instant resolution, customers will get a high-touch claims experience.

We specialize in customer experience consulting with domain expertise in modern Insurance and InsurTech solutions. Drop us a word at hello@mantralabsglobal.com for claims experienced focused products and solutions.


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Retention playbook for Insurance firms in the backdrop of financial crises

4 minutes read

Belonging to one of the oldest industries in the world, Insurance companies have weathered multiple calamities over the years and have proven themselves to be resilient entities that can truly stand the test of time. Today, however, the industry faces some of its toughest trials yet. Technology has fundamentally changed what it means to be an insurer and the cumulative effects of the pandemic coupled with a weak global economic output have impacted the industry in ways both good and bad.

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Source: Deloitte Services LP Economic Analysis

For instance, the U.S market recorded a sharp dip in GDP in the wake of the pandemic and it was expected that the economy would bounce back bringing with it a resurgent demand for all products (including insurance) across the board. It must be noted that the outlook toward insurance products changed as a result of the pandemic. Life insurance products were no longer an afterthought, although profitability in this segment declined over the years. Property-and-Casualty (P&C) insurance, especially motor insurance, continued to be a strong driver, while health insurance proved to be the fastest-growing segment with robust demand from different geographies

Simultaneously, the insurance industry finds itself on the cusp of an industry-wide shift as technology is starting to play a greater role in core operations. In particular, technologies such as AI, AR, and VR are being deployed extensively to retain customers amidst this technological and economic upheaval.

Double down on digital

For insurance firms, IT budgets were almost exclusively dedicated to maintaining legacy systems, but with the rise of InsurTech, it is imperative that firms start dedicating more of their budgets towards developing advanced capabilities such as predictive analytics, AI-driven offerings, etc. Insurance has long been an industry that makes extensive use of complex statistical and mathematical models to guide pricing and product development strategies. By incorporating the latest technological advances with the rich data they have accumulated over the years, insurance firms are poised to emerge stronger and more competitive than ever.

Using AI to curate a bespoke customer experience

Insurance has always been a low-margin affair and success in the business is primarily a function of selling the right products to the right people and reducing churn as much as possible. This is particularly important as customer retention is normally conceived as an afterthought in most industries, as evidenced in the following chart.

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        Source: econconusltancy.com

AI-powered tools (even with narrow capabilities) can do wonders for the insurance industry at large. When architected in the right manner, they can be used to automate a bulk of the standardized and automated processes that insurance companies have. AI can be used to automate and accelerate claims, assess homeowner policies via drones, and facilitate richer customer experiences through sophisticated chatbots. Such advances have a domino effect of increasing CSAT scores, boosting retention rates, reducing CACs, and ultimately improving profitability by as much as 95%.

Crafting immersive products through AR/VR

Customer retention is largely a function of how good a product is, and how effective it is in solving the customers’ pain points. In the face of increasing commodification, insurance companies that go the extra mile to make the buying process more immersive and engaging can gain a definite edge over competitors.

Globally, companies are flocking to implement AR/VR into their customer engagement strategies as it allows them to better several aspects of the customer journey in one fell swoop. Relationship building, product visualization, and highly personalized products are some of the benefits that AR/VR confers to its wielders.  

By honoring the customer sentiments of today and applying a slick AR/VR-powered veneer over its existing product layer, insurance companies can cater to a younger audience (Gen Z) by educating them about insurance products and tailoring digital delivery experiences. This could pay off in the long run by building a large customer base that could be retained and served for a much longer period.

The way forward

The Insurance industry is undergoing a shift of tectonic proportions as an older generation makes way for a new and younger one that has little to no perceptions about the industry. By investing in next-generation technologies such as AR/VR, firms can build new products to capture this new market and catapult themselves to leadership positions simply by way of keeping up with the times.

We have already seen how AR is a potential game-changer for the insurance industry. It is only a matter of time before it becomes commonplace.


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