The world is constantly evolving, and the insurance sector is running to keep up!
Take, for example, the increasing adoption of AI efficiency tools. Customer service bots that handle frontline queries are becoming more prevalent across a wide range of sectors, including financial services. According to a November 2024 report by the Bank of England and the Financial Conduct Authority, over 24% of the UK’s financial services sector was already using AI for customer support (including chatbots), with a further 36% expected to implement it over the next three years.
But with increased efficiency from AI tools, comes some risk. Several household names have publicly fallen foul of AI chatbot errors or ‘hallucinations’, including Air Canada which was ordered to honour a discount made up by its customer service chatbot at a tribunal last year.
Fortunately, we are seeing a range of innovative, new solutions being brought to market to help manage this changing business landscape. Just last week, The FT announced the launch of a product to cover companies for losses caused by malfunctioning AI tools. The policies, developed by Armilla and underwritten by Lloyd’s of London, will cover damages and legal fees incurred due to misbehaving chatbots.
Assureful, a customer-centric insurance product for ecommerce businesses was another company that caught my attention recently. It was created in response to the increasing shift from physical retail to ecommerce, when its founder felt that traditional insurance products were no longer fit for purpose. The pay-as-you-sell insurance product is based on actual monthly sales rather than an annual estimation, giving retailers much-needed flexibility in a challenging economic environment.
It’s interesting and encouraging to see both well-established industry players and emerging start-ups developing these kinds of products in response to customer need and changing business priorities. Putting customers at the heart of what you do is essential to maintaining a positive customer base, who will stay loyal to your brand, even in the face of a few misbehaving chatbots!
Read our blog on how insurance companies can maximise customer engagement through their communications by telling these important stories here.