What are two things that agency owners never have enough of? Time and money.
Proponents of artificial intelligence (AI) claim it can help agency owners optimize both their time and money.
Building On Your Strengths
Although innovation, creativity and determination are essential traits of successful entrepreneurs, AI can add other dimensions to your agency. In fact, nearly one in four small businesses have already adopted AI, according to a report from the U.S. Chamber of Commerce.
“AI systems can not only enhance efficiency, save time and improve decision-making across business operations,” the Chamber says, “but they can also optimize resources, personalize customer experiences and provide valuable insights on market trends.”
When people think about artificial intelligence, one of the first things that comes to mind is content creation, image manipulation, or other situations that modify or generate something new – like deep fake videos or photos. But that is only one aspect of AI. Here are the three primary types of AI being used in business today:
- Reactive AI systems respond to requests that aren’t fully based on past data, like Roomba vacuums or digital assistants (Siri and Alexa).
- Predictive AI systems analyze experiences and data to predict upcoming events or future behaviors – “recommended” shows on your streaming service are a good example.
- Generative AI systems, including Gemini and ChatGPT, are the ones getting a lot of attention right now. They can produce new videos, photos or text using existing data patterns to inform the output.
Here are some of the ways insurance agencies and small businesses are currently using – or expect to use – artificial intelligence:
- Conversational AI software for 24/7 chats. This tool reduces the time your staff spends answering standard policy and billing questions, which frees them up to handle more complex customer service needs. And since we often seek instant answers to our questions 24 hours a day, customers are increasingly comfortable interacting with an automated chatbot. In fact, many people prefer the rapid response from a non-human contact.
- Customer Relationship Management (CRM). AI-enabled CRM software can help identify trends and marketing opportunities based on its learnings from customer behavior and data. Renewal reminders, birthdays and life events can be identified by AI to feed automated marketing campaigns and relationship-building touchpoints. In some cases, conversational AI software can be linked to AI-powered CRM systems to enhance the value of the customer data and automating call transcriptions and meeting notes (that can be added to CRM) to ensure current information is available when talking with policyholders.
- Personalized Policy Recommendations. Predictive AI can provide personalized recommendations to customers based on their needs, preferences and life events. In the “old days” a staff member would manually (or even digitally) track dates and life events that can trigger a need for new insurance – today that can be done with less human input with arguably better results. AI algorithms can analyze customer data to suggest the most relevant insurance products. This can enhance the policyholder experience by offering tailored solutions and cross-selling additional coverage. By leveraging AI for personalized product recommendations, insurance agents can more efficiently deliver tangible recommendations leading up to the actual sales conversation.
- Routine task automation. Understandably, as AI began to explode as an option for certain functions, some people feared (or still fear) that AI will eliminate their jobs. Although automated processes can potentially deem certain employees to be redundant, today’s workforce is stretched thin and small businesses struggle to find individuals to fill entry-level positions. AI can also make existing employees more efficient, which frees them up to take on more meaningful responsibilities.
- Streamlined financial management. In addition to automating routine tasks, some AI tools can provide insights into cash flow patterns, expense tracking, financial forecasting and other important data. This contributes to more timely and accurate information, as well as highlights possible areas for expense reduction.
- More efficient hiring. AI-powered software can reduce the amount of time a staff member spends reviewing information from job-seekers by screening resumes or applications and narrowing down the candidate pool. While there is a risk of missing out on a potentially good employee who may not have their resume optimized for AI screening, this option is attractive to businesses that have high-volume hiring needs.
Getting Started with AI
Although each agency owner has different goals, you can approach the integration of AI tools in a similar way.
First, identify those inefficiencies and high-cost/low-reward activities that could be automated without negatively impacting the customer experience. Include your team in some of these conversations – not only will this reduce potential paranoia within the ranks, you’ll also gain valuable insights into areas where AI could be beneficial.
Next, learn how AI is being used within the insurance industry – not just in agencies, but also at the carrier level. For example, the NAIC’s December 2023 adoption of the Model Bulletin on the Use of Artificial Intelligence Systems by Insurers is a good place to start. Check out trade association websites or speak with peers who may have similar interests in weaving AI into their business plan.
As you bring AI-driven tools into your agency, it’s wise to reassure your staff of their inherent value and recognize their worth by providing them with training to adapt to the new approach to certain tasks.
Of course, technology moves fast today, so you’ll want to continue to assess the effectiveness and benefits of your chosen AI resources. You may need to pivot to another provider of a similar tool or shift to a different type of AI-driven capability. Always do your due diligence to be sure that you’re working with a reputable AI provider that has appropriate privacy protections in place.
If you’re ready to dive into AI – or you simply want to dip your toes in the water – we’re here to support your agency’s growth with operating capital for investment into your business.
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