To say that the insurance industry is undergoing change is a profound understatement. And the change is not limited to one operational area or role.
An important tool to help insurance companies keep pace with constant disruption is robotic process automation (RPA) — a digital technology that automates rules-based, deterministic processes across many areas within an organization. RPA offers a wide range of benefits, including: the elimination of human errors; improved compliance; time reduction and enhanced productivity; cost reduction; and the enablement of staff to focus on more valuable work.
As the insurance industry grapples with how to best balance the increasing role of automation with the human workforce, a couple of questions come to mind: How can this technology help organizations meet clients’ increasing expectations? And, more broadly, what kind of impact will RPA and automation have on operational processes in such areas as customer experience, insurance policies and risk assessment, pricing and management?
While the applications of these technologies create some uncertainty, the upside is tremendous — both from an operations and workforce perspective. RPA, like other digital technologies, functions as a digital asset that enhances the workforce, drives productivity and generates efficiencies — like the excel macro did for spreadsheets and the calculator did for manual computation before it.
To better understand the context in which these changes are taking place, it is important to move from the abstract to the concrete. RPA benefits insurance companies in a number of ways. A few practical examples include:
- Customer experience
- Policy and data conversions
- Risk assessment, pricing and management
Customer experience
Customer service is a cornerstone of the insurance industry. Having knowledgeable people paired with the right technologies helps improve the customer experience significantly. RPA, integrated into digital portals, can enhance customer experience by capturing, manipulating and processing data into legacy systems of record directly from client and marketing channels.
See also: Much Higher Bar for Customer Service
Traditionally when onboarding new customers, data moves into queues processed individually by humans. This approach requires humans to flag missing data, gauge the completeness of the request and then move this information from “one side of the desk to the other,” so to speak. Providing a prospect with a quote could take days of back-and-forth to flag and gather the right data.
For example, a life carrier seeking to speed up response times can use RPA to remove the too-long, manual processing of broker requests, which often are unclear or lack necessary details. Today, requests could wait in a queue for human review only to be then passed on to another group to rectify issues before the carrier could respond. The process could take days.
Insurers are now using RPA to evaluate requests upon arrival, immediately flag inaccurate or missing information and initiate follow-up requests. Response times are reduced from a couple of days to minutes. This automated process benefits customers, the workforce and business growth.
Policy and data conversions
The global insurance industry handles hundreds of millions of policies. Combining those with the sheer amount of data insurance companies need to process and crunch can make one’s eyes glaze over. To make matters more challenging, a tremendous amount of policy data still resides in legacy systems. And when insurers need to migrate to a new/different system, the process is manual, time-consuming and resource-intensive. What is the answer? Using RPA to digitize conversion processes.
Consider a life insurer that implements robotics to migrate legacy life insurance and annuity policies from a newly acquired portfolio of business. Instead of allocating 50-70 people to manually rekey the information, that company can now move policy and annuity data — some of which was unstructured — from the acquired company’s system into the acquiring company’s system.
RPA can perform these tasks for millions of policies, eliminating the manual, error-prone aspects of the work. RPA can operate 24 hours a day, seven days a week. This process allows for an alternative approach, one which could be more efficient, accurate and audit-able. It also allows employees to focus on more strategic, higher-value work like product development.
Risk assessment, pricing and management
Actuaries are typically inundated with an immense amount of claims data to sift through to help inform risk assessments. To help drive efficiency, RPA helps actuaries solve these challenges by reducing manual input and rekeying, reading disparate types of data (structured and unstructured) and identifying omissions and errors. Access to more accurate and insightful data enables actuaries to improve risk modeling and pricing.
Ultimately, this frees up high-value actuaries' time to focus on better risk assessments with a higher degree of accuracy.
What’s next?
The rapid pace of disruption shows no signs of abating. While it is easy to get sucked into the hype around RPA and broader automation applications, it is important to approach this process with a thoughtful purpose in mind — one that is targeted and deliberate.
RPA is a game-changer. The insurance industry is automating manual, repetitive and tedious tasks, allowing employees to focus on more valuable, strategic work. This helps not only with efficiency but can drive a greater level of engagement and fulfillment.
See also: The Current State of Risk Management
The future of work will involve machine and human collaboration. RPA will be a critical part of that evolution and will work in conjunction with other disruptive technologies, such as artificial intelligence, to continually improve the quality and consistency of the service insurers deliver to their customers. Digital resources will function as critical assets to drive stronger organizational efficiency and performance. Companies that are best able to balance the intangibles of human ingenuity, with the efficiencies of RPA and other forms of automation, will be best positioned to reap the benefits.
This material has been prepared for general informational purposes only and is not intended to be relied upon as accounting, tax, or other professional advice. Please refer to your advisors for specific advice.
