Artificial intelligence, especially through chatGPT, has made tremendous progress over the past year. With its convincing responses, it has opened up numerous business opportunities in various industries. We have focused on how this language model could assist in interpreting client contracts, specifically looking at insurance contracts and how it can transform the field of financial brokers.
Insurance contracts are often written in legal language and can contain many complex conditions and exceptions. This can lead policyholders to struggle with understanding what exactly is stated in their contracts. Over time, when they revisit the contracts and want to verify something, they often get lost in the context of complex terminology. What we have focused on is creating a simple summary of the different parts of these contracts in understandable human language.
ChatGPT can be used as an interactive tool to help policyholders understand key aspects of their insurance contracts. Policyholders can ask questions regarding their contracts, such as coverage, exclusions, benefit amounts, or policy duration. ChatGPT can then provide understandable and helpful answers to these queries, assisting policyholders in navigating their insurance contracts more effectively.
Testing virtual assistants in practice?
At MegaMethod, we have designed a virtual assistant to test the current quality of artificial intelligence responses to policyholder inquiries. The test responses are conducted on a standard closed accident insurance contract from Generali, dated 2017. The contract consists of a total of 6 pages. ChatGPT is provided with settings similar to those of an insurance advisor and is given access to the PDF of the closed contract. The test is conducted using the gpt-3.5-turbo model. We have selected a set of frequently repeated questions:
What is the account number where I should send the money?
The account number to which the insurance premium should be sent is 900500/2700, with the variable symbol corresponding to the number of this insurance policy.
How should I report an insurance claim?
You should report an insurance claim to the insurer by using the "Accident Notification" form, which is attached to the insurance policy. This form must be properly and truthfully filled out and signed by an authorized person acting on behalf of the insured organization. Along with the claim notification, you will also need to provide a medical certificate and any other documents requested by the insurer. The claim notification and necessary documents should be sent to the insurer's address. The insurer will not provide the insurance benefits without the submission of these documents.
I want to cancel the contract, what should I do?
If you wish to cancel the insurance contract, you must terminate it in writing and deliver the termination notice to the other party no later than June 30th of the respective calendar year. The notice period is therefore no later than six months before the anniversary date of the insurance contract's effectiveness. If you deliver the termination notice on time, the validity of the insurance contract will end on December 31st of the respective calendar year.
I want to make changes to the contract, what should I do?
According to the contract, changes can only be made through numbered written addendums signed by all parties involved. Therefore, if you want to make changes to the contract, you need to contact the contractual parties and agree on the details of the changes. Subsequently, a written addendum to the contract must be created, which must be signed by all parties involved. This addendum becomes an integral part of the original contract and is valid in the same manner as the original contract.
Advantages and disadvantages of AI?
Modern language models, such as chatGPT, excel at identifying the parts in a text that the user is seeking and can effectively summarize them in a few sentences. However, at least with the chatGPT 3.5 version, there is a lack of knowledge of the entire context of the contract (as seen, for example, in the question about the account number, where chatGPT only refers to the variable symbol, despite the contract also containing the contract number). The advantage of AI is that it can maintain the context of previous responses, allowing the user to provide further clarification on their specific intent. However, a challenge arises when considering the overall cost, as each question with context from previous answers and knowledge of the contract quickly adds up. Each of the individual questions above costs less than 1 CZK. If someone specifies their queries and engages in a prolonged conversation, such a conversation can cost you tens of crowns. It is therefore advisable to calculate whether it is cost-effective for you.
The future of AI in the services of brokerage firms and insurance companies?
The actual question and subsequent response to the client indeed save time that would otherwise be spent going through the contract. While this is a great help, it is not a fundamental change. Where AI brings about a significant transformation is in automating entire scenarios, such as AI-powered self-service for clients. Currently, it is possible to create sequences with language models like chatGPT that are automatically triggered based on discussions with the client, determining which action to initiate.
Imagine, for example, a client making a request in an application to handle a contract modification. They describe specifically why and what they want to change. AI, or the language model, understands what the client is saying and triggers one of the predefined actions for contract modification – such as sending a modification form, collecting necessary data for the change, negotiating with a broker regarding the change. It then presents the information to the client, schedules when everything will take place, and does so in a human-like manner, with text indistinguishable from human writing.
Even more value can be derived from AI initiatives reaching out to clients proactively. For instance, servicing approaching contract anniversaries or changes in fixed mortgage rates, where a chatbot can elegantly gather information about changes in the client's life. While human contact will be difficult to replace entirely, an increasing number of people expect to be able to handle everything through their phones.
The trend, especially during the COVID-19 pandemic, has shown that digitalization is a necessity. This approach not only saves time for both clients and brokers but also enables coverage of contracts and clients that brokers may have been unable to prioritize recently, thus generating business that brokers may have otherwise missed out on using traditional methods.