Two Ways Voice AI Can Bolster Insurance Profitability

There's more to AI than hype. When insurers implement insurance-native AI solutions that address their biggest operational challenges, the result can be lower costs, stronger customer experiences and measurable financial returns. However, not all AI is created equal.

Amrish Singh

min read

Key Takeaways

Insurers are investing heavily in AI, but not all organizations are seeing returns.
Common obstacles to a successful implementation include data readiness, security and system integration.
AI that’s built for insurance can deliver a strong ROI by addressing two major challenges: policyholder expectations and insurance labor shortages.
Insurance-native AI can deliver fast, positive customer experiences at scale.
Carefully-orchestrated and integrated AI can also alleviate pressure on overworked staff, helping to reduce burnout and turnover.

There’s no denying the hype around AI. The question is whether the hype is deserved. I think it is. When leveraged effectively, AI is more than a parlor trick capable of producing images, text and sound. It’s a tool that solves two major threats to insurance profitability: workforce challenges and policyholder friction.

The trick is applying AI to impactful use cases that actually make a difference.

What does AI mean for insurers?

Insurers are all in on AI.

In 2025, 73% of insurance executives cited AI as a top investment priority, according to KPMG.¹ Fortune Business Insights² expects the global AI insurance market to reach $154.39 billion by 2034, with North America leading the way.

But investment doesn’t automatically equate to results. A study from MIT³ found that 95% of organizations reported no measurable return from their generative AI investments.

Numbers like that can lead some people to conclude that AI is overhyped, but I think that’s the wrong takeaway.

An AM Best survey⁴ uncovered some important realities. Although 60% of insurance carriers and MGAs expect AI to significantly transform their business models in the next one to three years, impediments to progress are common. The biggest obstacles are data readiness, security and privacy and integration with legacy systems.

I’ve seen firsthand that insurers can achieve amazing results in a short amount of time – when they deploy AI solutions that are actually designed to address insurance pain points. Insurance-native AI is particularly well-suited to deliver a high ROI.

How Can Insurance-Native Voice AI Improve Policyholder Experiences?

If you think customers are demanding more from companies, you’re not alone. HubSpot⁵ found that customer service representatives are facing rising expectations, and 82% say customers now expect requests to be resolved immediately.

For insurers, these rising expectations are coinciding with increases in extreme weather claim surges. It’s difficult for claims and servicing teams to keep up, and policyholders haven’t been understanding. Premium costs have surged in recent years, and policyholders are fed up. From their point of view, they’re paying more and receiving less.

In light of this, it’s unsurprising that more customers have been thinking about switching carriers. According to LexisNexis⁶, insurance shopping volume has grown each year since 2009, and nearly 40% of households have shopped for auto insurance in the last 12 months.

Insurance-native AI solves many common policyholder servicing challenges:

Retain a higher percentage of policyholders. With always-on, AI-powered insurance services, insurers can reduce customer churn. ‍
Answer every incoming call with zero wait time. No one likes waiting on hold. AI agents answer every incoming call immediately, in a empathetic manner that is natural and engaging. The result is a seamless experience that avoids bottlenecks and long wait times, even when call volume surges. This can go a long way in retaining policyholders.
‍Convert more leads to customers. Fast response times are also essential when handling calls from people who are interested in buying coverage. Although buying coverage is not as stressful as a first notice of loss, people still don’t like to be kept waiting. By answering calls immediately, AI agents can convert more leads to customers.

How Can Insurance-Native AI Help Insurers Manage Their Workforce?

Your company may already be feeling the effects of the insurance industry talent shortage. Many younger workers are not pursuing insurance careers, whereas experienced workers are hitting retirement age. This is a problem that’s expected to become worse in the coming years.

AI can help. If you’ve ever worked a public-facing job, you know how draining it can be to deal with angry customers. By improving customer experiences, insurance-native AI can make work more pleasant for human representatives.

AI can also take on many of the tasks that human representatives dislike, such as data entry and other highly repetitive activities that don’t require higher-level thinking. This leaves more time for activities that human representatives enjoy, like building relationships and advising customers. The result is a more rewarding role that doesn’t result in burnout.

Making insurance jobs more rewarding doesn’t just benefit insurance workers. It also benefits insurance organizations. Turnover is expensive. Gallup⁷ says replacing an employee may cost one-half to two times the employee’s annual salary. By creating more enjoyable positions, insurers boost retention to cut labor costs, and that’s on top of the direct cost savings from reducing workloads. AI agents provide consistent performance around the clock, allowing human teams to focus on higher-value work.

What Else Can AI Do for Insurers?

Right now, staffing shortages and policyholder dissatisfaction are two pressing challenges for the insurance industry. AI agents add value by addressing these two issues. However, that’s just the beginning. Insurance-native AI can also:

Eliminate language barriers. Translation issues are a major pain point for call centers. AI agents can seamlessly switch between various languages, meaning speakers of any language receive immediate attention.
Catch fraud and mistakes. Fraud is a constant loss driver for insurers, whereas honest mistakes drain resources. Insurance-native FNOL workflows can be integrated with fraud detection tools to flag potential issues fast.
Reduce sales leakage. With Voice AI, insurers can be available for prospects 24/7. They also never miss a call or an opportunity, meaning that more quotes can be issued and more policies can be bound. Finally, organizations can grow and handle more business without adding a proportionate number of new team members.

Insurance companies using Liberate's insurance-native AI platform are reducing operating costs, improving customer experiences and getting into production in weeks, not years.

Sources:

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