What consumer data reveals about insurance agents vs. bots
Clearsurance looked closely at the digital insurance customer experience in the wake of the recent State Farm/Lemonade dust-up.
A recent State Farm commercial showing a malfunctioning robot trying to handle an insurance claim sparked a social media dust-up between Lemonade and State Farm and created an interesting discussion around the potential success of using AI bots in place of agents.
At Clearsurance, we were inspired to look into what consumers were saying in Lemonade reviews and State Farm reviews to determine if consumers had a preference for agents or bots.
At a time when technology is constantly changing how consumers shop, buy and interact with companies in all markets, consumers will ultimately dictate how insurance is sold and serviced.
Related: Changing consumer expectations continue to impact insurance
Bots reveal customer service is evolving
The jury is still out on whether consumers are satisfied with a claims handling process done by bots. We haven’t collected enough claims reviews of Lemonade from consumers to adequately say. But one thing is certain: time will indicate if it’s a viable solution.
In the meantime, consumer data does show bots aren’t an issue at other points in the insurance company-policyholder relationship. Take a look at these consumer ratings for Lemonade and State Farm.
What we’re seeing is the meaning behind customer service is evolving. A couple of decades ago, it would’ve been unimaginable to buy insurance in minutes online. But advances in technology have allowed things that took hours a few years ago to take minutes now. If consumers didn’t value speed and online convenience when shopping, Amazon wouldn’t be valued at more than a trillion dollars.
Insurance may be lagging behind the e-commerce industry when it comes to technology, but the influx of InsurTech startups leveraging technology are thrusting the industry forward. State Farm’s commercial seemed to insinuate bots can’t do the job of an agent, and while they certainly may do the job differently, consumers have indicated the premise of State Farm’s commercial is incorrect.
Some consumers may prefer the human interaction that a captive or independent agent can provide. For others, they seem to value the speed and efficiency that Lemonade is able to provide.
For now, State Farm and Lemonade can easily co-exist in the market with vastly different service strategies. But what works now — or in State Farm’s case what’s worked for nearly a century — may not be what works five or 10 years from now.
Related: How insurance agents can use bots for a competitive edge
Adapt or pay the price
Consumers’ needs and wishes are constantly evolving as technology advances. Companies will need to continue to evolve to meet these needs. Look at Sears or Toys ‘R’ Us. Sure, it’s a different industry, but these are companies who refused to adapt. As a new wave of millennial and Gen Z insurance policyholders begin to enter the fray, companies will have to evolve to avoid turning into the Sears of the insurance industry.
The discussion between agents and bots is just getting started, but it’s one to watch as more InsurTechs enter the market aiming to disrupt the traditional way insurance is serviced and sold.
Related: Business intelligence and machine learning highlight the need for change
Ryan Baillargeon (ryan.baillargeon@clearsurance.com) is the Director of Content for Clearsurance, a leading online publisher of insurance consumer data. These opinions are his own.