Excessive paperwork, endless communications, and unclear processes. This was the reality for insurance customers until artificial intelligence (AI) chatbots showed up.
Now, these virtual assistants for insurance handle claims, guide policy selections, and answer questions 24/7 without the usual runaround. In fact, the global AI in insurance market size reached $10.82 billion in 2025 and is projected to exceed $141.44 billion by 2034.
Insurance chatbots use conversational and generative AI to manage entire processes from marketing to customer support, not just answer basic FAQs. They create and share answers through natural, human-like interactions.
This blog post will discuss how AI in insurance automation works and offers customers value through a conversational experience.
What are insurance chatbots?
Insurance chatbots are virtual assistants that automate customer interactions across multiple channels. They are the first touchpoint for customer processes, be it answering basic policy questions or guiding complex claim submissions.
These tools work across websites, apps, and messaging platforms to provide 24/7 support for improved customer satisfaction.
But not all chatbots function in the traditional sense.
For instance, rule-based chatbots follow preset scripts and decision trees. They operate on simple if-this-then-that logic, answer FAQs, guide customers through basic processes, and handle routine tasks with preset responses. These work well for standard questions but struggle with complex requests.
On the other hand, AI-powered chatbots use natural language processing (NLP) and machine learning (ML) to understand customer intent. They can handle more complex conversations, learn from interactions, and provide personalized responses.
The most advanced systems can analyze customer history, suggest personalized coverage options, and complete transactions across channels.
AI chatbot for insurance — putting conversational experience in the limelight
Conversational AI in insurance chatbots uses NLP and machine learning. It understands queries, provides accurate policy information, and guides users through processes like claims, renewals, and payments.
From answering simple questions like "What does my policy cover?" to assisting with complex tasks like "How do I file a claim for my damaged car?", an AI chatbot ensures quick, seamless customer support. It also maintains contextual understanding throughout conversations and allows customers to switch topics from policy coverage to claims without losing the conversational flow.
Unlike basic rule-based bots, AI-powered insurance chatbots can analyze customer history, suggest personalized coverage options, and even complete transactions. Plus, they work across websites, apps, and messaging platforms, providing 24/7 assistance wherever customers need it.
You can configure your AI agents with Plivo to automate your chatbot experience in various use cases, such as:
- Pre-sales inquiry agents explain policy coverages, deductibles, and exclusion clauses using your underwriting guidelines and product database.
- Sales conversion agents turn leads into policyholders with personalized plan recommendations based on coverage needs and budget.
- Campaign orchestrator agents trigger policy renewal campaigns, launch seasonal coverage promotions, and upsell messages to the policy lifecycle.
- Personalized offer agents build custom policy packages through risk factors, claim history, and demographic data analysis.
- Customer retention agents prevent policy lapses with timely reminders and loyalty incentives before renewal deadlines.
- Billing and subscription agents handle premium payment questions and explain coverage adjustments with clear, helpful answers.
- Customer support agents resolve policy questions and claim status inquiries 24/7.
The platform also offers specialized agents that analyze shopping behavior to study customer preferences and deliver product updates to target audiences.
Here’s how a conversation with Plivo’s AI-powered agent looks like in action:
👤 Customer: Hi, I need details about your health insurance plans.
🤖 Plivo AI Agent: Sure! Are you looking for individual or family coverage?
👤 Customer: Family. Also, what is the eligibility criteria?
🤖 Plivo AI Agent: Got it. I’ll need some basic details to check eligibility. How many family members are included, and what’s the age of the primary policyholder?
👤 Customer: Four members; the primary holder is 35 years old.
🤖 Plivo AI Agent: Perfect! Based on this, you qualify for our Premium and Standard plans. Would you like a quick comparison of their benefits?
👤 Customer: Yes, please.
🤖 Plivo AI Agent: Sure! The Premium Plan includes OPD, maternity, and dental coverage, while the Standard Plan focuses on hospitalization and critical illness. Would you like a quote for both?
👤 Customer: Sounds good. Also, what is the renewal period?
🤖 Plivo AI Agent: Policies renew annually. Right now, we’re offering a 10% renewal discount for early sign-ups.
👤 Customer: Nice! Let’s do it. Can I pay here?
🤖 Plivo AI Agent: Absolutely. Here’s a secure payment link: [link]. Let me know if you need any assistance.
👤 Customer: This was super easy. Thanks!
🤖 Plivo AI Agent: Happy to help! Let me know if you have any other questions. 😊
This seamless experience is just the beginning. You can also train the chatbot based on your custom dataset. Simply feed your company policies and knowledge base for accurate and relevant responses. Try Plivo CX’s self-service AI chatbot, developed and powered by OpenAI, for businesses of all sizes.
Top companies using the platform are seeing results.
"Our support team was drowning in basic queries before we found Plivo's AI Agents. We simply fed our support documents to the Customer Support AI Agent, and within days, the Agent was handling routine cases like a pro! The best part? It works around the clock and speaks multiple languages. Plivo made implementation surprisingly straightforward.” - Uber
AI chatbots’ impact across various use cases
AI chatbots are transforming customer interactions, with 80% of users reporting positive experiences. In the insurance industry, where companies handle countless queries daily, chatbots help provide faster responses, reduce wait times, and improve customer satisfaction.
Here are some key ways insurance chatbots can enhance efficiency and engagement.
Claims processing and settlement
Insurance customers always find the claims process long and frustrating. However, with an insurance claims chatbot, customers can report incidents, upload documentation, and track status through a single interface.
The chatbots collect claim information through conversational exchanges, rule out suspicious actions, request supporting evidence like accident photos, and guide users through each step.
Here’s a look at the benefits:
- Reduced processing time
- Collecting First Notice of Loss (FNOL) information through guided conversations
- 24/7 claim submission and status tracking
- Automated fraud detection through data analysis and image verification
- Consistent updates on claim progress and expected settlement dates
- Decreased workload for human agents
Policy management
Insurance chatbots handle the entire policy lifecycle (from application to renewal) without human intervention. Your agents can skip all the lengthy phone calls and paperwork to give customers direct control over their experience.
Customers can use policy management chatbots to:
- Update personal information
- Review policy documents
- Make coverage adjustments
- Complete policy renewals
- Order insurance cards
Customer onboarding
Traditional insurance onboarding requires manual data entry and verification. However, a chatbot makes onboarding faster, more efficient, and less stressful for customers. It also automates follow-up tasks so customers can complete all required steps to finalize their policy without feeling overwhelmed.
These chatbots for policyholders simplify onboarding by:
- Answering product and coverage questions
- Guiding users step-by-step through the purchase process
- Collecting payment data
- Directing customers to relevant resources (FAQs, knowledge base, and documentation)
- Assisting with initial account setup
Risk assessment and underwriting
Insurance chatbots pre-screen applications and provide underwriters with customer data through guided conversations. This speeds up underwriting with accurate assessments.
Some AI-driven chatbots also analyze data and offer risk recommendations to help insurers make informed decisions faster.
Chatbots offer an added layer of security through secure, sensitive customer data handling. Since data processing tasks are automated, there’s minimal human intervention and a lower risk of data breaches.
Fraud detection
AI-powered chatbots can analyze large volumes of data faster than humans and identify hidden threats that might otherwise go unnoticed. Here’s how these automated systems prevent fraud:
- Flag suspicious claims based on inconsistent information
- Detect unusual patterns during the application process
- Request additional documentation when fraud indicators appear
- Alert human investigators to potential problems
Payment collection
Customers no longer wait on hold to make payments over the phone.
Chatbots allow policyholders to make one-time payments or set up recurring payment schedules within the same conversation flow. With these tools, you can:
- Send timely reminders for upcoming premium payments
- Auto-fill customer payment details to save time
- Process payments through secure digital channels
- Provide instant payment confirmations and receipts
Advertising and promotion
Marketing teams use chatbots to replace static website forms with interactive conversations that engage visitors. The outcome is valuable data about customer preferences and pain points. Using this, chatbots can:
- Capture lead information through conversational interactions
- Distribute relevant content like guides and blog posts
- Share information about seasonal promotions and loyalty discounts
For example, when data shows many customers asking about specific coverage types, insurers can adjust their promotion strategies to highlight those policies or develop new offerings to meet emerging customer needs.
Cross-selling and upselling
Chatbots help you analyze customer profiles, policy information and claims history to identify sales opportunities at the right time. They can:
- Suggest additional coverage options based on life events
- Recommend policy upgrades when customer needs change
- Offer bundled products with special discounts
- Present relevant add-ons during policy renewals
For example, when a customer adds a teenage driver to their auto policy, the chatbot might recommend an umbrella policy for extra liability protection. Or when a homeowner updates their property value, the chatbot can suggest adjusting coverage limits.
Chatbots support multiple languages, so diverse customer bases can benefit from your services.
Feedback and loyalty
After claim processing or support resolution, you can collect customer feedback directly through the chat interface. The chatbots:
- Gather responses immediately after claim processing
- Present simple button options for quick ratings
- Send automated surveys via email or chat after conversations end
- Track Net Promoter Score (NPS) data over time
The best part? Customers don’t need to leave their preferred communication channel, leading to better response rates.
Why an AI insurance chatbot makes business sense (beyond just conversations)?
Leading insurance providers have already proven that AI chatbots deliver measurable results. Beyond basic customer interactions, their implementation shows clear return on investment (ROI).
Lemonade, a renter’s insurance company, improved customer experiences with three specialized chatbots: Maya, Jim, and Cooper.
Users rely on Maya for seamless navigation through insurance processes, while Jim specializes in managing claims and detecting suspicious activity. Cooper streamlines internal workflows between teams.
Maya can process new policies in just 90 seconds and even made headlines for approving and paying a claim in under 3 seconds. Meanwhile, Jim handles over 20,000 claims annually without human intervention.
Aetna's chatbot, Ann, provides 24-hour support on their website. She understands natural language queries and delivers immediate written and spoken responses.
Since implementation, phone calls to Aetna's call center have decreased 29%. Members receive the same responsive service from Ann that they would get when calling customer service, all without leaving the website.
Tokio Marine Insurance deployed its chatbot "Tokio" to serve UAE customers across the web, WhatsApp, and Messenger. The bot handles quotes, claim tracking, and policy renewals with zero human intervention.
It manages 70% of their inbound queries and will expand to support both Arabic and English to serve their diverse customer base.
The next decade for AI insurance chatbots looks strong
CB Insights recently shared these key predictions on X for the insurance industry in 2025:
In the next few years, AI will change the insurance industry (for good) in the following ways:
- Policy purchasing will become instantaneous. AI algorithms will create risk profiles in seconds, while telematics and Internet of Things (IoT) devices enable carriers to issue immediate policies. Life insurance will expand into mass-market instant products through AI-refined risk identification.
- Claims automation will handle half of all processing activities. IoT sensors, drones, and video footage will replace manual assessments. Connected home devices will alert both residents and insurers before damage occurs.
- Underwriting for most personal and small-business products will change completely. Machine and deep learning models will compress the process to seconds. These systems will combine internal and external data to generate tailored bindable quotes.
Adding to the list, blockchain and augmented intelligence will improve security, claims processing, and fraud prevention. As chatbots continue to advance, a scalable solution is key.
The right vendor will help you stay competitive, adapt to industry shifts, and deliver faster, smarter customer experiences.
Implement an end-to-end conversational chatbot using Plivo
Plivo’s AI-powered self-service chatbot handles complex support and sales scenarios with 90-95% query resolution.
With a single platform for customer engagement across acquisition, engagement, and service, Plivo centralizes customer data, eliminates the need for ETL (Extract, Transform, Load) processes, and automates workflows using AI.
It delivers a personalized experience with a custom voice and identity by supporting 30 different languages with global coverage in 220+ countries and territories.
As these AI agents take over routine conversations, your team can focus on innovation, strategy, and growth — doing 50x more with the same resources. Contact us to get started today.
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