AI in the insurance market has surged to $10.24 billion in 2025, but insurance customer service has a reputation problem. If you’ve ever tried to update a policy, check the status of a claim, or confirm coverage over the phone, you’ve felt it firsthand.

Long hold times. Confusing portals. Repetitive questions.

Behind the scenes, insurers are grappling with rising costs and staffing challenges. Seasonal spikes, natural disasters, and open enrollment periods can push teams to the breaking point.

Bottom line: traditional customer service models can’t scale. But using conversational AI in insurance can.

Conversational AI isn’t just an upgrade, it’s a new way forward. An AI customer service agent acts as your frontline policyholder rep. It can answer questions, process updates, and deliver always-on support across channels and at scale. The insurers who embrace it now are building AI customer service strategies that are faster and far more reliable than human-only models.

This is your guide to understanding how conversational AI in insurance is transforming customer service for both property and casualty (P&C) and health insurers, and why it’s quickly becoming the backbone of a modern insurance customer experience.

What is conversational AI for insurance?

Conversational AI refers to AI-powered systems—like chatbots, AI agents, and virtual assistants—that interact with people in natural language. In insurance, AI customer service agents are trained to support complex workflows with accuracy, speed, empathy, and built-in trust through secure policyholder authentication.

What’s the difference between a chatbot and an AI agent?

The difference between a chatbot and an AI agent isn’t just technical. It’s operational.

Chatbots follow pre-written scripts. They can help with basic tasks like listing office hours or linking to a help article. But when a customer needs to understand their deductible, update a policy, or check the status of a claim? That’s where chatbots fall short.

AI agents are built for complexity. They don’t just respond—they resolve. An AI customer service agent can:

• Understand intent across multi-turn conversations,
• Take action, like processing a policy update or initiating a claim,
• Personalize responses using real-time customer and policy data,
• Route complex inquiries to licensed agents with full context, and
• Stay consistent across channels and languages.

How a conversational AI customer service agent raises the bar for insurance

An agent can handle questions, resolve tickets, complete transactions, and hand off to human reps, all while tracking performance and learning over time. Think of an AI customer service agent as a smart front-line employee who never sleeps, understands context, and always stays compliant.

In practice, conversational AI for insurance means:

• Supporting customers across channels like chat, voice, email, and SMS,
• Understanding incomplete or informal phrasing,
• Verifying coverage and initiating claims,
• Managing policy changes, billing issues, and document requests, and
• Routing sensitive issues to licensed agents with full context.

The result is a policyholder experience that’s faster, smarter, and more scalable, even during seasonal surges or high-stakes moments.

Why more insurers are turning to conversational AI for customer service

Nearly nine in ten insurers are exploring generative AI, and 55% have already implemented it across claims, underwriting, and customer experience workflows.

Insurers are turning to AI agents as a core part of their customer service strategy. And the shift is being driven by real, measurable business pressures, like:

• The rising cost to serve: Traditional support models are people-intensive and expensive. As inflation and wage demands grow, AI agents offer a scalable, always-on alternative by resolving thousands of queries at a fraction of the cost.
• Unpredictable demand: Claims volumes don’t follow a tidy curve. Natural disasters, flu season, and regulatory deadlines all trigger support spikes. AI agents scale instantly, without the lag of hiring or training new reps.
• Customer expectations: Customers expect the same ease and speed from their insurer as they do from their favorite ecommerce brand. They don’t want to wait on hold to ask about a deductible or check their claim status.
• Regulatory complexity: Insurers must adhere to strict rules. Conversational AI agents can be trained to follow underwriting policies, apply SOPs, and flag sensitive terms, reducing the risk of compliance violations.
• Multilingual and omnichannel demand: Many insurers serve diverse populations. AI agents can communicate fluently in 50+ languages, over voice, chat, SMS, and email, reducing barriers and increasing equity.

So what does this shift actually deliver, and how is AI in the insurance industry proving its value beyond the hype?

For insurers like Trust & Will, the impact goes beyond efficiency. Their AI agent, Will-E, handles routine inquiries with speed and accuracy, giving human agents the space to support customers through more complex, emotionally charged conversations.

Let’s take a closer look at the benefits of conversational AI and the outcomes insurers are already seeing.

How does AI improve customer service in the insurance industry?

The best conversational AI programs aren’t just fast and flashy. They actually move the needle on business outcomes that matter. That means they:

• Reduce cost to serve: By automating high-volume interactions, AI customer service agents reduce ticket volume, agent workload, and cost per contact. Customers get answers without the overhead.
• Increase CSAT and NPS: Customers hate waiting. AI agents deliver instant answers, across channels, with zero hold time—with the satisfaction scores to match.
• Speed up resolution times: Whether it’s a claim update, policy change, or provider search, AI agents resolve inquiries in seconds, not days.
• Deepen operational visibility: Every AI conversation is tracked, measured, and reportable. That gives CX leaders insights into what’s working and what to improve next.
• Ensure safety and compliance standards are met: AI agents follow policy logic, log interactions, and escalate when needed. That reduces the risk of non-compliant interactions and the cost of errors.

These aren’t just theoretical gains. Trust & Will’s AI agent, Will-E, maintains a 70% automated resolution rate and 75% CSAT, allowing their lean support team to stay focused on high-impact conversations, even during emotionally complex moments.

What are the top AI use cases in insurance?

AI customer service agents are already resolving millions of insurance interactions every month. The most common AI use cases in insurance CX map directly to the highest-friction parts of the customer journey—from claims and billing to benefit navigation and ID card retrieval.

Let’s break it down by line of business.

How P&C carriers are using AI agents for customer service

Property and casualty insurers aren’t just juggling claims and coverage. They’re doing it under constant pressure to move faster, cut costs, and stay consistent, even when volume spikes. Whether it’s natural disasters, mid‑term claim surges, or waves of annual renewals, service demand can surge at any time.

That’s why more insurers are putting AI agents to work, automating the high-volume, repetitive interactions that slow teams down, so human agents can focus where they’re needed most.

Here are five of the most valuable AI use cases in P&C insurance:

• Claims status: Policyholders don’t want to wait on hold just to find out where things stand. AI agents can pull real-time claim details from your internal systems and instantly update customers on their claim status, progress, and next steps.

• Coverage explanation and eligibility checks: “What’s covered under my policy?” is one of the most common (and complex) questions insurers get. AI agents can retrieve policy details, interpret coverage rules, and clearly explain what is or isn’t eligible — including deductibles and limits.
• Policy changes or endorsements: Whether a customer is adding a new vehicle, updating their address, or requesting an endorsement, AI agents handle the request end-to-end. They authenticate the policyholder, process the change, and confirm completion.
• Policy renewals and processing: When customers reach out with questions about upcoming renewals, AI agents can confirm dates, walk them through policy updates, confirm payment details, and activate the next term. It’s a seamless process that helps reduce lapses and improve retention.
• Proof of insurance delivery: Instead of calling in, customers can request and receive their insurance ID cards or proof of coverage instantly, sent via email or text, directly from the AI agent.

How health insurers are using AI agents for customer service

Health insurers are expected to deliver fast, accurate answers across a complex web of plans, benefits, and compliance rules—all while managing seasonal spikes, rising costs, and overworked support teams.

In the U.S. alone, over $100 billion in avoidable healthcare costs are tied to underused preventive care—much of it caused by gaps in communication and follow-through.

AI agents take pressure off the front lines by resolving high-volume, high-friction member requests instantly and accurately. From benefits confusion to eligibility inquiries, they handle the work that used to bog agents down.

Here are five of the most valuable AI use cases in health insurance:

• Billing and payment assistance: AI agents can break down bills, clarify charges, explain due dates, and offer payment options to reduce confusion and deflect high-volume calls around premiums and benefits usage.
• Claims status: Members can ask for real-time updates on submitted claims, including whether they’ve been received, approved, denied, or need additional info without logging in or waiting on hold.
• In-network provider lookup: Instead of relying on clunky portals, members can ask an AI customer service agent to find nearby, in-network providers filtered by specialty, location, and language preferences.
• Policy inquiries: AI agents help members understand their coverage, answering questions about deductibles, copays, benefits, and renewal dates using real-time data from your systems.

• Updating personal or dependent information: Whether it’s a new address, phone number, or dependent addition after a life event, AI agents can guide members through secure updates and ensure records are kept current.

Whether it’s answering a billing question or updating a policy, AI agents are already transforming how insurers handle day-to-day service, reducing load on teams while delivering faster, more accessible experiences for customers.

But not every inquiry starts with a keyboard. When urgency spikes—a claim, a care concern, a payment problem—many customers still reach for the phone.

What can AI voice agents do for insurance companies?

When a customer calls their insurer, it’s rarely a low-stakes interaction. They’re calling because something’s gone wrong: a claim needs attention, a prescription didn’t go through, a bill doesn’t make sense. These aren’t moments where insurers can afford friction, delays, or endless transfers.

That’s why more carriers are expanding their automation strategy beyond chat and putting AI voice agents to work on the front lines.

What the best AI voice agents for insurance can actually do

Voice is just another channel, but to customers, it’s the most human one. That’s why the best voice AI agents deliver the same great experience on the phone as they do in chat: fast, accurate, always on-brand.

Here’s what they can do:

• Authenticate callers using policy or member info
• Personalize responses based on real-time data from backend systems
• Follow multi-step SOPs to guide customers through complex workflows, without bouncing them between departments
• Escalate intelligently when needed, passing full context to human agents
• Speak 50+ languages, with real-time speech-to-text and text-to-speech
• Reduce AHT and call volume by resolving more calls, faster

For insurers, voice AI isn’t just a channel upgrade. It’s the key to modernizing high-stakes support moments without compromising empathy, safety, or speed.

That’s why the best voice AI agents for insurance aren’t cobbled together from chat scripts. They’re built with resolution, compliance, and scalability in mind. They integrate with your backend systems, follow strict policy logic, and speak your brand across every channel.

The result? Smarter conversations, faster outcomes, and service teams that can finally keep up with demand.

AI in the insurance industry is already raising the bar

AI customer service agents are quickly becoming the backbone of how insurance leaders deliver service. From P&C to health, insurers are using AI to resolve claims, answer benefit questions, manage policy changes, and more, all with less reliance on human headcount.

And when you find AI with the right operating model, AI agents don’t just support your team—they become your team’s most scalable, reliable, and consistent performers. They resolve complex workflows across channels and systems. They help licensed agents focus on the moments that matter most. And they give CX leaders full visibility into what’s working, what’s not, and where to go next.

The results are already here. Higher CSAT. Lower cost to serve. Faster response times. And a better experience for every policyholder without compromising compliance, personalization, or control.

AI in the insurance industry isn’t hypothetical anymore. It’s operational. And the smartest insurers aren’t just adopting AI agents, they’re building around them.

So the only question left is: are you ready to make AI your most reliable policyholder rep?