Insurance revolution: bots more trustworthy?


Classic intermediaries in the insurance industry are agents and brokers. Unfortunately, some people have trust issues when dealing with intermediaries. Insurtechs recognize this flaw and have started to offer alternatives to customers who previously shunned insurance operators due to past experience with classic intermediaries.

One good alternative example is an insurance chatbot that uses artificial intelligence (AI) and machine learning to interact with customers in order to analyze and identify customer needs, and propose an insurance policy that may be suitable for each customer. For example, customers can simply tell the chatbot about their travel plans, and find out which appropriate insurance plans are available.

This insurtech could be integrated into different platforms, such as messenger apps or desktop computers, where it will pitch and sell various insurance products directly to customers.

Currently, an AI health assistant is readily available to the market. The technology provides advice to users, by delivering tips on how to improve their health and quality of life. Insurtechs are able to use these services to assist them with offering insurance products that are more tailored to the lifestyles of users.

Insurtechs analyze user data from various sources to provide truly personalized insurance products. They do so by first establishing a relationship of trust with customers so that they can obtain further information, following which they use the information to develop an attractive product and offer it to potential customers.

The questions then arise as to whether these insurtechs are considered agents or brokers, and what legal requirements must be satisfied. The offering and sale of insurance products through insurance agents and brokers are generally regulated. Those regulations govern the whole process of an insurance product purchase, from when it is offered, to when its sale is concluded. Even simple acts, such as conversations, are regulated.

Insurance agents and brokers are required to obtain insurance licences from the Office of Insurance Commission. But what happens if portions of the insurance business are run by an AI function? Is selling online exempted from regulations? Selling insurance products through an intermediary via online channels is also subject to specific regulations. Each distribution channel has its own set of requirements, which can be complex and confusing. These issues need to be carefully considered and verified with trustworthy legal advisers.

Business Law Digest is compiled with the assistance of Baker McKenzie. Readers should not act on this information without seeking professional legal advice. You can contact Baker McKenzie by emailing Danian Zhang at