Imagine a process improvement that increases productivity not by 10%, or 50%, but solid 90% or more. Envision reducing claims cycle times by days or weeks and slashing operations costs by 70% or more. Picture boosting customer satisfaction by 45% practically overnight.
Is it any wonder that insurance executives faced with the need to please demanding and tech-savvy customers—while reducing the cost of operations—are increasingly turning to robotic process automation (RPA)?
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What is robotic process automation in insurance?
The concept of “robots” in an industry that relies on customer satisfaction and the “human touch” may make many uncomfortable, but in fact, RPA is ideal for many insurance processes, particularly labor-intensive ones such as applications handling, claims processing and data entry.
Insurers can benefit from the relentless accuracy of a tireless robot that flawlessly executes to the required standard at a fraction of a cost.
Many insurance companies are global, with complex systems, diverse language and regulatory requirements and an absolute need for data security, accuracy, risk mitigation and processing efficiency. Therefore, RPA can take care of certain actions that can fundamentally change how the industry works.
- Copy and paste data between different applications
- Open emails, gather data and move it into a core system
- Calculate data to create month-end profitability reports
- Integrate with workflow automation, rules engines and other components for fully automated processes
- Use artificial intelligence (AI) add-ons to enhance bot capabilities
The benefits of RPA in insurance
There are some key benefits of using RPA for insurance that policy-makers cannot ignore in this day and age.
- Increased productivity: employees spend less time on monotonous work and repetitive operations and can devote more time to complex tasks and customers;
- Reduced number of human errors: the AI machine learning solutions will decrease the number of mistakes by automating calculations and operations;
- Higher efficiency: increased productivity and reduced number of errors will result in higher efficiency of your services;
- Better employee performance: once you take off your employees the burden of repetitive tasks and allocate them to deal with more complex ones that require strategic decision-making and thoughtful insights, it will have a positive effect on your team, as they have to solve challenging issues;
- Streamlines claim processing: RPA will help you organize and automate customer claims;
- Improved regulatory compliances;
- Better customer experience;
- Enhanced data analysis: insurers can use AI solutions for data processing and analysis. They can process volumes of data quicker and give more detailed information about customers. This information will help you design better offers and deliver a personalized experience;
- Reduced costs: the implementation and use of RPA will save the company’s budget as hiring and training human resources requires more costs and takes a lot of time.
Insurance companies rely on a mix of legacy applications and systems. RPA can help link these disparate systems — with minimal coding — so insurers can conduct operations faster, reduce labor costs and explore new areas of business innovation. In fact, Gartner predicts that by 2025, 70% of new applications written by enterprises will use low-code or no-code technologies.
11 RPA use cases in insurance
RPA in the Insurance industry can automate the end-to-end process lifecycle by integrating new front-end technologies with back-office environments. Let us elaborate more on this.
1. Claims registration and processing
Claims processing requires companies to gather a vast amount of information from a number of sources, creating exhaustive quantities of data. This has resulted in excessive levels of manual processing.
RPA in Insurance integrates different claims processing information from multiple sources. It can automate the extraction of data, complex error tracking, claim verification, integration of claim relevant data sources and more; consequently, speeding up the process and creating a better customer experience.
2. Regulatory compliance
The insurance sector faces strict guidelines for documenting work and creating audit trails. Automation is instrumental in helping companies improve regulatory processes as it replaces the need to devote significant staffing to go through operations to enforce regulatory compliance manually. Validating existing customer information, regulatory report generation, sending out account closure processing notifications are a glimpse of the scenarios which RPA in Insurance can automate.
3. Underwriting
Underwriting requires the evaluation of risk and exposures of clients. A great deal of data scrambling, analyzing and determining the risks involved before landing on a conclusion takes more than 2-3 weeks on average.
Robotic Process Automation automates the process of data collection from various external and internal sites. It can also be used to populate multiple fields in the internal systems with relevant information and produce a report or make recommendations while assessing the loss of runs, thus automating the process which forms the basis for underwriting and pricing of products.
4. Process and business analytics
In insurance companies, the vast number of operational and paper-intensive processes make it difficult to track and measure operational efficiency or identify areas of improvement.
With automation processes in place, the tasks performed by software robots can be tracked easily. The audit trail provided by RPA helps with regulatory compliance which further supports process improvement. Therefore, claims and customer service response times are improved, and customers benefit with streamlined applications.
5. Integration with legacy applications
Insurance companies still rely heavily on legacy applications for business processes handling. Implementing ERPs or BPM systems is truly quite challenging as it requires integration with legacy apps. RPA can fit into the existing workflow of the insurance companies and what’s better is that a well-planned RPA implementation can comply with any type of available system.
6. Policy admin and servicing
From quoting, rating, underwriting to distributing customer services – policy administration links all the functions of an insurer.
RPA in Insurance allows all key players within each process or each silo to accomplish a plethora of operations easily. It essentially automates transactional and administrative parts of activities such as accounting, settlements, risk capture, credit control, tax and regulatory compliance.
When freed from mundane and routine tasks, back-office staff can be redeployed into front-office roles where they can focus on complex customer demands and generate growth.
7. Form registration
The integration of optical character recognition (OCR) with RPA enables insurers to automatically interpret content from registration forms and direct the information into the appropriate workstreams. This increases accuracy and data quality while reducing backlogs by 40% with half the workforce.
8. Policy cancellation
Policy cancellation involves many transactional tasks such as tallying cancellation date, inception date, policy terms and so on. With RPA in Insurance, policy cancellation can be carried out in just one-third of the time.
9. Sales and distribution
RPA can ease the daunting task of sales and distribution in insurance. Creation of sales scorecards to push notifications to agents, conducting compliance, legal and credit checks are some of the processes that can be automated and established with RPA.
10. Finance and accounts
RPA systems can perform clicks, keystrokes, pressing buttons, template auto-fill, copy-pasting information, field entries and more, thereby automating a significant portion of daily bank reconciliations and minimizing transactional expenses as well as policy-cost footprint.
11. Scalability
Robotic Process Automation in Insurance is scalable given that any number of software bots can be deployed as per the need of the insurance company. What is more? Additionally deployed RPA bots can be rolled back as and when needed, at no extra cost!
Strategies of successful RPA implementation
The practical implementation of RPA in the Insurance industry is complex. It requires effective planning. Let’s look at some steps that are essential for a successful RPA implementation.
1. Identify the right processes
To identify opportunities that are best suited for RPA, it is essential first to conduct a top-down diagnosis of end-to-end processes. Questions like whether the methods need to be standardized or re-engineered before getting automated must be addressed during this step.
2. Define a vision and strategy
Establish a clear strategy or a roadmap to gauge RPA implementation. Important checkpoints in defining a strategy involve a three-step process.
a) describing the process flow using steps and rules
b) determining robust processes/tools that enable agile delivery and
c) developing automation plan by mapping each step of the process.
3. Establish governance and authority
Ensuring that a C-suite member is leading the automation program goes a long way in securing timely checkpoints. There should also be coordination between the IT and Operations department to maintain Business As Usual (BAU).
4. Foresee talent impact
This happens to be perhaps the most overlooked aspect of RPA implementation projects. Impact of automation on traditional roles and ensuring stakeholder buy-in is essential and cannot be bartered. A disciplined approach is critical in ensuring the best way to engage the workforce and as an organization, it is vital to create an atmosphere of acceptance among the employees.
5. Evaluate technology
Assess current technological capability and identify the tools and partnerships needed to enable desired business outcomes.
6. Run pilots
Test the solutions to identify weak areas and ensure that implemented technology delivers business value as planned. Also, it is essential to acknowledge your employees with changes and train them on how to use the updated systems.
Get ready to grow
Executives must develop a deep understanding of both the capabilities of the available technologies and their end-to-end business processes.
If an automation effort focuses on just one tool, such as RPA, benefits may prove disappointing.
Instead, insurers should develop a comprehensive intelligent process automation strategy that considers how complete processes can be optimized with a variety of technologies.
Focusing only on headcount reductions is shortsighted. Insurers must realize these changes will not be easy for them or their people.
Consider how bots and cognitive technologies can work together to improve customer experience, service quality, cycle times and compliance reporting.
Finally, developing an IPA CoE is critical for insurers looking to coordinate their efforts and apply learnings from one initiative to the next.
Automation should not be regarded as an IT project. It is a comprehensive business strategy that is absolutely critical for every insurer over the next few years.
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