Allstate’s AI Revolutionizes Customer Service
Artificial intelligence is rapidly transforming various aspects of the insurance industry, from claims processing and underwriting to pricing and marketing. Allstate, a major player in the insurance market, is at the forefront of this change, with some surprising results. According to a report in The Wall Street Journal, the company has found that AI-generated communication is proving to be more empathetic than many of its human representatives.
Allstate’s shift towards AI-driven communication has led to clearer and more compassionate interactions with its customers. Zulfi Jeevanjee, Allstate’s CIO, revealed the company now relies on OpenAI’s GPT models to draft nearly all claims-related emails. This initiative ensures messages align with company-specific terminology and reduces the use of industry jargon, improving customer experiences.
“When these emails used to go out, even though we had standards and so on, they would include a lot of insurance jargon. They weren’t very empathetic…Claims agents would get frustrated, and so it wasn’t necessarily great communication,”
Jeevanjee said in an interview with the WSJ.
With around 23,000 representatives handling approximately 50,000 customer communications daily, AI is now writing the majority of these messages. While claims agents still review the emails for accuracy, they are no longer responsible for drafting them. “The claims agent still looks at them just to make sure they’re accurate, but they’re not writing them anymore,” Jeevanjee added.
Customer service has become a key area for generative AI adaptation as companies seek to improve interactions and maintain a personal touch. AI’s ability to keep interactions consistent and clear is proving valuable in the insurance sector, where claims resolution often involves complex communications.
The Human Element vs. Automation
While Allstate is ahead of many competitors in using AI-driven communications, other insurers are testing their own unique implementations. Josh Streets, a senior consultant at the International Customer Management Institute, noted that while Allstate is ahead of many competitors in deploying AI-driven communications, other insurers are quietly exploring similar applications. Nationwide, for example, is experimenting with AI to summarize case details for claims representatives, which allows agents to focus more on customer interactions. However, Nationwide maintains that human agents are still better suited for delivering empathy.
Jeevanjee explained that Allstate’s customer service previously suffered from excessive reliance on industry terms that often confused policyholders. For example, claims agents could refer to acronyms or specific terms without explanation, leading to confusion. An example provided by Allstate illustrated the contrast between human- and AI-generated responses. A claims representative initially used the acronym “UPP inventory list”, while the AI version defined it as “Unscheduled Personal Property inventory list.” This refinement helps customers fully understand their claims process.
AI’s ability to neutralize potentially tense exchanges is another advantage. Human representatives may sometimes adopt an accusatory tone, while AI-generated responses are designed to approach situations with a more understanding perspective. “Generative AI gives customers ‘the benefit of the doubt’,” Jeevanjee noted. Additionally, AI-generated emails incorporate a courteous tone. For example, AI-enhanced responses may begin with phrases such as “Thank you for your message. I understand your concern,” and conclude with, “If you have any other questions, feel free to ask.” Human-written messages often lack such reassuring language.
Job Security in the Age of AI?
While Allstate insists this AI-driven transformation will not result in job losses, industry experts remain divided on job security within the industry. A survey conducted by the International Customer Management Institute found that 35% of respondents believe AI will reduce hiring needs, while 38% think it will have little impact. Beyond customer interactions, insurers are exploring AI’s potential for assessing risk, pricing policies, and evaluating claims.
Insurers are continuing to explore the benefits and drawbacks of AI. As AI’s role expands, companies will need to consider ethical considerations and how to balance technology and human expertise. Despite studies indicating many customers prefer interactions with real people, growing trust in AI suggests that preferences may evolve over time. The challenge for businesses, including insurers, will be leveraging AI’s strengths while preserving the human elements that foster trust and connection.
