Reporting a life insurance claim is a difficult time for the client. 

To put it concretely, one of your clients has just passed away and one of his relatives contacts you thinking he is the beneficiary of the contract. 

The emotional charge of the client is important. In addition to dealing with his grief, he has to deal with many long and complex administrative procedures. 

Let’s look here at how a chatbot can automate this process to make it easier for the customer while limiting the costs for the insurer.

Summary

1. Explanation of the process
2. Impacts for the insurer and the beneficiaries
3. Usefulness of a chatbot to automate the declaration of a life insurance claim
4. Conclusion

1. Explanation of the process.

The management of an estate in its entirety is a real ordeal for the relatives of the deceased. 

The mountain of administrative procedures may seem disproportionate to the emotional burden felt by recipients.

Life insurance contracts are no exception to the rule. This subject is all the more taken seriously by insurers as several of them have been pinned down for mismanagement of unclaimed policies (premiums not paid to beneficiaries).

This is the case, for example, of CNP Assurances (€40M) or Allianz (€50M), which, according to the ACPR, did not make enough effort to identify the beneficiaries and pay the amounts due.

When the policyholder dies, it is necessary to report the death to the insurance company. 

In general, this declaration is made by one of the relatives of the deceased (spouse, children, etc.).

Next, the insurer must validate that the declarant(s) are indeed the beneficiaries of the contract. 

Indeed, the contract contains a clause that allows to designate the beneficiary or beneficiaries of the life insurance. It is either a standard clause: in this case the direct heirs are the beneficiaries. Or a nominative / free clause: the subscriber has designated the person or organization to be the beneficiary of the contract. 

Once one of the beneficiaries is validated, the insurer must contact the other beneficiaries (if any) to continue the process. 

Next, the insurer must provide the beneficiaries with the documents to be completed and returned. These documents depend on the beneficiary’s personal situation and relationship to the deceased. For example, the procedures for the spouse of the deceased will be less complex than for a non-family member. 

Once all the documents have been received and validated (which often requires several round trips between the insurer and the beneficiary), the insurer has one month to pay the amount due.

This amount can sometimes be deducted from the taxes that the insurer pays. 

This entire process is often managed manually with document exchanges by mail and phone calls to the appropriate department.

2. Impacts on the insurer and beneficiaries

I had the opportunity to work on such use cases with multiple insurers (almost all French insurers). So I was able to glean some global information, of which I propose you a synthesis below.

For example, the number of calls to the estate service is approximately 100,000 calls per year. 

The settlement time is 3 months on average  (from declaration to payment), with cases that can drag on (6-9 months).

Overall customer satisfaction is very low, with a negative NPS.

The result is rather negative for insurers:

• manual process, which consumes FTEs on low value-added tasks,
• structural costs related to customer calls, part of which can be automated,
• almost impossible to retain beneficiaries on new life insurance offers given the customer satisfaction.

3. Usefulness of a chatbot to automate the declaration of a life insurance claim

A claim (car, home, life,…) is never a pleasant moment for the customer. 

Especially on life insurance. 

The client needs to be listened to, taken in hand, accompanied with as much sensitivity as possible. 

It is therefore not possible to replace the entire relationship with a robot.

However successful it may be, it can never replace the human intelligence needed in this kind of situation. 

Instead, it can help the insurer remove procedural friction points throughout the customer experience. 

Here are some specific elements on which the chatbot brings a real added value in the management of the estate:

1. Inform about the major steps

The majority of clients are completely unaware of the life insurance settlement process. This is often the first time they have faced this situation.

They don’t know how long it will take, what paperwork needs to be filled out, what taxes are inherent to their situation etc…

A chatbot can provide a lot of information at this level in order to prepare the customer for the process he will have to face. 

2. Facilitate the exchange of documents

Today, documents are transmitted from one party to the other by mail, whereas the legislation now admits digital documents.

Exchanging these documents via a chatbot not only makes receiving and sending them easier for the customer, but also allows the insurer to collect structured data on the uploaded documents (OCR, identity verification…). 

The chatbot is also a good way to help the customer fill out the paperwork, which reduces the number of round trips between the parties. 

3. Follow the file

One of the black spots most cited by clients in this process is the lack of visibility on the progress of the file. 

We don’t know if we will be settled in 2 weeks or 6 months. To get this information, you often have to call the customer service, wait etc…

The chatbot can send push notifications on the progress of the file (email / SMS / messaging apps). 

The customer can also contact the chatbot himself to find out where things stand. 

Conclusion

I repeat once again, chatbots (and what is called Artificial Intelligence) in general are not intended to robotize human relations, especially customer-company relations. 

A robot will never (at least not right away) be endowed with empathy, listening, etc…

On the other hand, it is an ideal tool to provide personalized and tactical information to ease the mind of customers in what can be tedious processes. 

What insurer doesn’t dream of offering its clients the possibility of writing a text message and saying “Hey, what’s the status of my file?” and receiving the answer in 5 seconds.

You can download the pdf of this article here.