How to Automate Insurance Renewals Using AI

For insurance companies, the majority of revenue comes from insurance policy renewals.

The roadblock? Well, for most teams, making sure these policyholders stay onboarded can be pricey! 

This is why a lot of companies want to know how to automate insurance renewals to avoid this. 

But the fact is that retaining an insurance policyholder costs around 7 to 9 times less than getting a new customer! 

That’s why we’ll walk you through how to automate insurance renewals using AI.

(something that allows you to retain 28% more policies than when done manually)

What are the Common Issues When You Automate Insurance Renewals

Why do people hesitate when it comes to automated insurance policy renewals?

Well, as you might know, the insurance industry is heavily regulated with non-compliance fines on calls. These range from $500-$1500 by the TCPA (Telephone Consumer Protection Act), to begin with. That said, this does not include the more expensive E&O exposure that also exists!

But here are the common issues you can face when looking to automate your insurance renewal with AI agents:

1. Improper Orchestration Layers: When you automate insurance renewals, the main issues have to do with AI losing context or duplicate work. Most of the time, this happens in the orchestration layer, where the AI tool lacks logical reasoning or detailed SOPs.
2. Error-Prone Workflows: One of the most common issues with AI is hallucinations. AI hallucinations in the automated insurance re
3. newal workflows can cause E&O exposure. This can even lead to lawsuits. For instance, even if a policy renewal process automation has 99% accuracy, with 50-step workflows, this falls to only 60% error-free completion.
4. Incompatible Legacy Systems: A lot of insurance companies run on legacy systems and databases. These are typically built on legacy languages like COBOL that are often incompatible with most AI automation. Agencies that run on legacy systems are one of the major AI system integration challenges insurance agencies face. This comes in the way of native insurance AMS integrations or API keys that most tools use.
5. Ignoring Non-Renewal Notice: Many policyholders, when applying and availing their insurance, opt for non-renewal. In these cases, ignoring these can lead you to provide extended coverage free of cost. Or even worse, open your insurance company to additional E&O exposure.
6. UI Updates That Ruin Automation: For automation, it can be easy for issues to occur due to UI changes and inconsistent data structures. As users on Reddit point out, there is a lot of fog or unreliable information and issues around insurance automation.

What to Audit Before the Renewal Automation Framework

Insurance AI and insurance automation are not the same thing! But most AI allows you to automate your insurance renewals using workflows.

And to help handle this, your checklist to automate insurance renewals comes with everything you would see with AI data governance.

But taking this one step further, there are also the compliance laws and regulatory requirements. These come with the insurance industry and BFSI in general, like:

1. Data Quality and Accuracy: Ciberspring states that your data should be properly classified, labelled, and free of bias. Industries like finance and insurance typically have requirements like SR-11-7 that need this in place.
2. Policyholder Renewal: A lot of the time, you need to make sure your company and renewal automation system have agents that notify the client. You need to do this 30 days in advance to avoid forced coverage, according to the NAIC. With this, they also need to take into account their preference to avoid any E&O exposure that may fall on your insurance company.
3. Governance and Compliance: With this, you need to make sure the AI, or the tools to automate insurance renewals you're working with, are GDPR, SOC-II, or CCPA compliant. Also, private data typically needs auditable logs based on which users access the information.‍
4. Third-Party Vendor Risk: With third-party vendors, make sure that audit artifacts and access logs of employees are recorded. This goes especially for those with access to privileged information to help reduce the risk.
5. Regulatory Frameworks: Automated systems typically need to have a system for fairness tests. For this, companies must make sure that demographics are not routinely under-quoted or denied coverage. In terms of setting up AI agents for FNOL and initiating claims processing on call, following best practices for insurance AI voice agents helps lower your overall exposure. But, on the whole, this typically requires an internal auditor who checks for data accuracy and screens for data bias.

How Thunai AI Handles Customers During Insurance Renewals

Policyholders are legally required to receive an insurance renewal notice 30 days in advance. Which is why tools like Thunai can connect with all channels to help create automated renewal workflows.

Aside from this, it also makes sure you retain customer lifetime value since your customer stays with your company instead of moving to another insurance agency.

When it comes to helping automate insurance renewals, Thunai can carry out:

• Outbound Calls for Insurance Renewal: Integrating with your CCaaS, VoIP, or Telephony software. Thunai AI voice agents for insurance companies can make outbound calls for insurance renewal. This can be based on your SOPs and with a human-like intelligence AI voice.
  
• Omnichannel Engagement: Aside from this, you can connect Thunai with your email systems for automated emails. And aside from this, integrating with WhatsApp and the messaging platforms lets you use conversational AI in insurance for better reach for renewal notices.
• Policy Compliant AI Co-Pilot (Thunai Sidekick): In cases where your team is making outbound calls, Thunai helps in real-time. This is through an AI co-pilot that helps reduce AHT and lets agents have all policy-related and accurate answers at their fingertips at any time. Thunai does this with SOC-II, GDPR, and even ISO42001 compliance.
• AI Call Scoring: In terms of visibility of how your agents’ calls are going, Thunai allows you to score 100% of calls. This is based on the criteria and SOPs you want your insurance agents to follow.
• Multilingual AI Translation: When dealing with multiple languages and different regions, Thunai allows real-time translation. This is available in over 200+ languages for AI agents on voice, email, and chat.
• ‍Integration With Existing Techstack: With Thunai MCP, you can connect with almost any app (even on-prem apps). With this, you can continue working with your existing tech stack - this includes your CRM, ticketing software, CCaaS, and other databases.

How to Measure Renewal Automation ROI Success

In the insurance industry, it’s essential to keep in mind that most insurance agents spend 60% of their time on administrative tasks.

So to help reduce this, investing in AI agents for insurance can automate insurance renewals, and generate $5.40 return for every 1 dollar invested. Below, we’ve listed the typical ways you can measure renewal automation ROI success.

1. Policyholder Retention: Even modest increases of 5% annually can result in 25-95% profitability. This applies when compounded over 5 years. Aside from this, agencies that use omnichannel outreach report a 35-45% increase in renewal. This can be seen within 90 days of setting up their insurance renewal automation framework.
2. Policy Lapse Reduction: Policy lapses result in lost revenue and commissions. Not to mention higher acquisition costs! It goes without saying that increasing policyholder retention with automated insurance policy renewals automatically reduces this.
3. Dedicated Dashboards: Dedicated dashboards can track stalled renewals, outreach effectiveness, and retention rates. These details, along with policy statuses on a single dashboard, help managers plan initiatives. This also helps teams track operational efficiency and measure the overall success of their insurance renewal automation.
4. Insurance Renewal Timelines: Average time to renewal is another metric that helps you measure success. This is in terms of your insurance workflow automation. Also, shorter insurance renewal timelines help prevent insurance policyholders from moving to competing agencies. Although trivial, this too can be a fact that helps with your policy renewal strategy.

This can be measured as:

Average Time-to-Renewal = Renewal Completion Date − First Renewal Outreach Date

5. Investment vs. Manual Cost for Tasks Carried Out: For insurance teams, the cost for manually scaling insurance renewal outreach is high. This could look like $180,000+ annually (average annual salary $60,370/agent) for 3 agents when done manually. But with automated workflows, this can be brought down to $5000 monthly. 

Start Automating Renewals the Right Way

Before you roll out any insurance renewal automation as covered, you need to make sure that you clean your database. Aside from this, you need only reach out to people who have granted consent.

This goes specifically for communication on specific channels and renewal outreach. The case on this can change, provided you’re within the 30-day renewal window.

That said, in order to automate insurance renewals in your agency, you need to have a system that has AI agents for insurance. ‍

Alongside this, it must have a simple insurance renewal workflow automation and humans in place.

This goes especially for reliable governance and avoiding the risk of expensive fines.

Want to know what automating your insurance renewals looks like with Thunai? 

Book a free demo with our team!

FAQs on Automating Insurance Renewals

How long does it take to implement renewal automation?

The timeline to automate your insurance renewal process can look different based on the software and process you choose to put in place. If this is a basic CRM automation paired with an AI tool like Thunai, it can be set up in under 7 days. However, this process can vary if you’re looking to automate insurance renewals, building the entire system from scratch.

Does renewal automation actually improve retention rates?

Renewal automation campaigns show a 28% higher renewal rate than when done manually, according to experts at unlockedCRM.

What are the biggest mistakes agencies make when automating renewals?

Some of the biggest mistakes agencies make when automating insurance renewals is treating AI and automation as a complete replacement for human agents. The truth is, insurance renewal automation works best when it comes to reducing the 60% of administrative work insurance agents need to do manually.