Insurance customers will have to get used to talking to machines

Frustrated with automated answering machines before you finally get to speak with a customer service representative?

When it comes to insurance, you’ll probably end up dealing with a robot rather than a human within three years, according to a survey by Accenture.

About two-thirds of insurers already use artificial intelligence-based “virtual assistants,” the consulting firm said in the report, which was published on Wednesday. Of the executives who took part in the survey, 85 percent said they plan to invest “significantly” in AI in the next three years.

“It’s coming pretty quickly,” John Cusano, global head of Accenture’s insurance practice, said in a telephone interview. “One of the first services to be managed differently will be routine inquiries about the status of claims or bills, which in the past have been handled by call centers.”

A combination of price pressure and ultra-low interest rates is forcing insurers to cut costs to preserve their profit margins. Introducing more automation is one way of achieving this, while also satisfying a greater demand for digital products and to fend off competition from fintech startups that also offer insurance products.

Allianz, for example, is digitalizing policy underwriting and claims handling as part of a plan to achieve $1.1 billion of productivity gains in 2018.

“In the U.S., major insurers such as Allstate and Geico have already launched virtual assistants,” Cusano said. “As Google, Apple, Samsung and Amazon push virtual-assistance products, it will help spread their use in the industry.”

Insurance companies will spend on average $90 million on artificial-intelligence technologies by 2020, according to research from Tata Consultancy Services. The IT consulting firm forecasts in a study that insurers will place fourth behind telecommunications ($131 million), high tech ($119 million), and banking ($99 million) in AI spending by the end of the decade.

Geico uses a virtual assistant for its mobile application called Kate, according to the Accenture report.