A new insurance customer has entered the chat: an AI agent
By 2030, personal assistants powered by artificial intelligence will handle every aspect of insurance buying, from comparing policies to filing claims. This transformation reshapes everything insurers thought they knew about customer relationships.
I've spent decades watching technology reshape our industry. From cloud, computerised underwriting, blockchain to online aggregators, each wave brought predictions of disruption and hope – some delivered but some didn’t. Today, I believe we’re witnessing what may be the most profound shift yet: the emergence of artificial intelligence as a new customer.
Here's my contrarian view: this transformation won't destroy customer relationships, but it will finally create genuine ones. By the end of the decade, most insurance transactions will involve AI assistants acting on behalf of human policyholders, as outlined in Cognizant’s No More Human Customers white paper. These digital advocates will negotiate terms, complete purchases, and manage ongoing relationships with insurers. But rather than eliminating the human element, they'll elevate it to where it actually matters.
We're looking at a fundamental restructuring of how insurance operates, from marketing and sales to claims and customer service. But here's what the industry is missing: we've been so focused on processing transactions that we've forgotten what customer relationships actually mean.
Consider what we call "customer relationships" today. Most involve form-filling, price shopping, and administrative hassles. Human contact happens when something goes wrong, not when something goes right. We've built an industry around friction rather than genuine value.
AI assistants will handle all that friction, freeing human interaction for what it should be: understanding life changes, facilitating the claims process, explaining complex risks, and providing reassurance during difficult times. When the routine disappears, the meaningful remains.
Large Action Models – the next step from Large Language Models – enable AI systems to evaluate and perform tasks rather than discuss them. These systems fill forms, navigate websites, and complete transactions across multiple platforms.
Think about the current complexities in insurance buying. Customers spend hours researching options, comparing policies, and completing lengthy applications. They struggle to understand complex terms and often make suboptimal choices due to information overload. In addition, we are often over-insured – for example, phone or travel insurance is often covered by multiple products. AI assistants eliminate these pain points.
An AI assistant can evaluate every available policy, cross-reference coverage against specific needs, and complete applications in minutes. These systems learn from each interaction and become increasingly sophisticated advocates.
Technology meets market reality
The economics are compelling. AI assistants never tire, never forget policy renewals, and never accept substandard terms for convenience. They monitor market conditions and switch providers when better options emerge.
We’re working with some of our early adopter clients who are experimenting with AI tools for insurance research. Within months, these capabilities will expand to form completion and purchasing decisions.
As AI helps consumers filter promotional messages, direct marketing is redefined. This encourages businesses to compete on true value, prompting marketing to evolve towards substance and meaningful engagement. Brand loyalty will stem from dependable performance and unique experiences, with marketing's crucial role being to effectively articulate this value.
Here's the uncomfortable truth: most insurance "relationships" aren't relationships at all. They're dependencies and necessities maintained through complexity and inconvenience. AI assistants will eliminate that artificial friction, forcing us to build genuine value propositions.
The transparency demanded by AI systems will force product and pricing simplification, which benefits everyone. Customers will have a clearer understanding of what they're buying. Insurers will compete on substance rather than obfuscation. The market will become more efficient for all participants.
Here's where the industry has it backwards: we assume that removing humans from transactions removes humanity from insurance. The opposite is true.
When AI handles routine interactions, human touchpoints become precious and purposeful. Instead of spending time on form completion and price comparisons, insurance professionals can focus on elements of the claims experience, understanding life changes and explaining complex coverage decisions.
Think about when customers most need human interaction: when they're worried about coverage gaps, when they've experienced a loss, when their circumstances change dramatically. These conversations can require empathy, creativity, and deep understanding of individual situations. No AI system can replicate this genuine human value.
Better customer relationships and genuine value
The efficiency gains from AI-mediated transactions create space and resources for insurers to invest in these meaningful interactions. We could return to the advisory relationship that insurance originally represented, and possibly where professionals help people understand and manage their ‘holistic risk’ rather than simply process their paperwork across multiple lines of business.
Organisations that embrace AI assistants as customers rather than obstacles will thrive. Yet this requires fundamental changes to business models, technology infrastructure, and operational processes.
Successful insurers will develop APIs that enable interaction with AI assistants (until that’s done by the personal AI assistant) while simultaneously investing in high-value human capabilities. They'll structure product information for algorithmic evaluation while training advisors to handle complex, emotionally charged conversations.
This dual approach recognises that the future isn't human versus machine, it's human plus machine. AI handles what it does best – data processing, comparison, routine transactions. Humans focus on what they do best – understanding, empathising, creating solutions for unique situations.
AI assistants will evaluate factors beyond price, such as service quality, claims handling reputation, financial stability, and advisor expertise. This creates opportunities for insurers with genuine competitive advantages to differentiate themselves effectively.
The insurers that recognise this paradigm shift will gain sustainable competitive advantages and compete on who can deliver the most value when it matters.
The emergence of AI assistants as insurance intermediaries represents our industry's opportunity to return to its fundamental purpose: helping people manage risk and recover from loss. By embracing this change, we can finally build the customer relationships we've always claimed to want.
The AI assistant revolution is reshaping insurance, whether you're prepared or not. Understanding how to engage these digital customers will determine your competitive position for the next decade. Download here our comprehensive analysis of AI-mediated insurance purchasing and discover how leading insurers are adapting to serve their new digital customers.
