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Chatbots are ubiquitous these days. These AI computer programs simulate a conversation—either via voice or text. Some can be quite convincing, and there’s been an uptick in applying this technology to customer service—including among insurance companies.

Insurance companies like GEICO, HDFC Life, and Liberty Mutual have all launched chatbots for customer service—and according to a recent Twilio study https://techcrunch.com/2016/09/12/twilio-study-most-consumers-now-want-to-use-messaging-to-interact-with-businesses/, approximately 90% of consumers want to be able to communicate with businesses via messenger apps.

But are chatbots right for your insurance business? Here’s a look at the pros and cons.

Pros

Chatbots are always available. You can only employ a limited number of customer service representatives—and you can’t keep them on 24/7. Customers have to wait their turn, and get in touch only during business hours. This can be frustrating for customers with an urgent need.

Chatbots eliminate this problem. There’s no limit to the number of customers a chatbot can serve; there’s no wait time and they’re available any time of day or night.

Chatbots are cheaper. No full-time salary, healthcare benefits, sick leave, and office costs. Chatbots can do a lot to cut down on expenses.

Enhanced data collection. When you use an AI messenger chatbot, you can mine these customer conversations to identify trends and improve your business. This data isn’t always as readily available with in-person customer service, especially over the phone.

Cutting-edge technology. Some chatbots are quite sophisticated—and are designed based on algorithms that mimic natural conversation.

Cons

Less capacity to solve complex problems. Chatbot technology has come a long way—but they still run off a script. A customer service agent will still have a greater ability to be creative in solving problems.

This is the same problem less sophisticated phone trees have—a circular conversation that does not address the customer’s issue.

The better your chatbot, the more costly it will be. The reality is that a very complicated chatbot—one that can solve more challenging customer issues and has a greater capacity for flexibility—will cost thousands of dollars more than a simple one.

The more complex your chatbot, the more time it will take to set up. If you need a complex chatbot with custom programming for every conversational pathway, you could be looking at a significant amount of time for setup and testing. This further narrows the cost and efficiency advantage of using a chatbot.

Chatbots aren’t always the cheap and easy solution—but that doesn’t mean they can’t save your business time and money. Whether or not you use chatbots on your website, however, chances are you’ll need in-person customer service contacts to resolve more complex challenges.