Australia’s AAMI, a subsidiary of Suncorp, has become the first insurer worldwide to trial a virtual assistant to help customers with their questions and scoping their motor insurance policy, and GlobalData’s tech survey suggests other insurers will follow.

In an industry-first move, digital avatar AVA leverages artificial intelligence (AI) and responds to emotional cues to humanise the interaction with customers. AVA offers a glimpse of the customer journey of the future as providers increasingly adopt advanced technology to modernize the digital channel.

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Customers are increasingly favouring the digital channel for their purchases and interactions across all industries, including insurance. And using advanced technologies such as AI can help businesses transform their digital capabilities.

According to GlobalData’s 2020 Tech Trends Survey, 62% of insurance businesses worldwide are currently investing in AI. In addition, a significant proportion of insurance businesses (35%) believe that AI will significantly disrupt the industry. Furthermore, 54% of insurance businesses cited that AI was playing a role in helping their company survive the COVID-19 crisis.

Yet AAMI has taken AI to a different level. AVA is not merely a chatbot powered by AI, nor is it a personal assistant like the better-known Siri or Alexa. AVA has a face of its own and appears online wearing the AAMI uniform top. More importantly, AVA can reproduce human-like engagements with customers, as it recognizes inflections in tone and is able to read customers’ facial emotions. Unlike conventional bots, AAMI has brought together emotional intelligence and AI to humanize the experience, and in this way, it aims to bridge the gap in AI.

While AVA is just being trialled, the technology is certainly promising. It has the potential to improve customers’ experience through the digital channel, which in fact COVID-19 has made ever more relevant owing to lockdowns and social distancing restrictions. There are many customers who would prefer to interact with their insurer in a fully digital way, and AVA offers more than conventional chatbots. Equally, AVA can also suit customers who would rather speak to their insurer directly, through a phone or face to face, as it brings phygital together.

The trial will only improve the way AVA learns and communicates with customers, while AAMI is bound to roll the technology across its other products. It is bound to inspire other insurers, forcing them to become more creative in the way they innovate and leverage advanced technology to respond to customers’ channels of preference.