Five principles insurers must know before building their automation roadmap

Most insurers are stuck in the early stages of digital transformation. Meanwhile, customers want superior claims processes, knowledgeable salespeople, and live chat – all of which require the intervention RPA and AI. That's why it's vital to remember five essential factors when embracing intelligent automation, gaining from digital technologies with disturbing business continuity.

The current state of the insurance industry makes it imperative to adopt the latest digital innovations, such as robotic process automation (RPA) and artificial intelligence (AI). Together, this will enable intelligent automation where machines can adapt to insurance workflows as per customer demand and expectations nimbly. Consider the following statistics to understand this further:

  • 49% of customers rank a superior claims process as their number one demand, compared to 42% who prioritize the price point of an insurance product. This means that insurers must adopt RPA to streamline claims processing, above all else.
  • Insurance customers want to interact with knowledgeable salespeople when buying a policy, yet this factor sits low on most insurers' priority list. An RPA platform can enable a single source of truth that allows salespeople to offer value-added services; an automated AI chatbot could even deliver knowledge to customers without human intervention.
  • 76% of insurers feel they are ready to meet customer expectations of the future – but most firms are lagging in terms of digital maturity. 61% are still in the early stages of transformation, with 17% heavily dependent on manual processes and old systems like spreadsheets and fax. RPA adoption could bridge this gap.

     

  • 89% of insurance agents do not have live chat capabilities, despite customers moving to chat-based interactions en masse. Strategic deployment of automation will be critical to help agents to keep up with customer needs.

These are among the key trends pushing insurers to explore intelligent automation. This reason is why banks, financial service providers, and insurers account for the largest share of the intelligent automation market, a space expected to cross $20.7 billion by 2026. To take advantage of this trend, insurers must keep five factors in mind.

Intelligent automation and digital insurance

Look for a vertical-specific automation tool

Given the size of the RPA and AI landscape, there are a plethora of options to evaluate. Insurers should be careful to zero in on a solution attuned to their needs – cumbersome document-based workflows, legal regulations, data privacy laws, large volumes of information (structured, unstructured, and legacy formats), etc. Vertical-specific automation will simplify deployment and speed up time-to-value, as there are fewer configuration needs, and the solution fits into the existing IT ecosystem seamlessly.

Identify and prioritize RPA use cases

Initial assessment of business processes will reveal multiple candidates for automation. It is essential to prioritize these use cases according to three parameters

  • The risk factor, i.e., the risk of business interruption due to the implementation process
  • The full-time effort (FTE) currently devoted to a task, specifically manual hours
  • The business value of the use case, be it a superior CX or a direct revenue uptick

Those use cases with a low-risk factor consuming sizeable FTE, and having a tangible business value should be at the top of the automation checklist. Check out this article to understand typical challenges you’ll get into and what it takes to over come them.

Define training and change management guidelines

Manual processes are still a staple for most insurance companies. 35% as per the report we cited follow a mix of automation and manual, while at another 26% of firms, less than 50% of transactions operate via straight-through processing (STP). The leap to intelligent automation is a big one, and the workforce should equip themselves with all that's required. A change management playbook that factors in existing skills and mindsets, clearly mapping the to-be-achieved state, is vital. This way of working will allow insurers to maximize their automation investments.

Evaluate RPA scope and impact

The insurance value chain is replete with areas where automation could play a role. From automated document management for underwriters to chatbots for CRM and smarter claims processing, the scope for this technology is massive. Insurers should continually evaluate their digital footprint and look at new areas of impact, apart from active use cases. In other words, RPA adoption should be an ongoing process – not a one-off initiative – adding value to the insurance enterprise over time.

Focus on the strategy rather than tool selection

Automation isn't an out-of-the-box solution that can fit onto the existing IT landscape with zero configurations. That's why looking for the best tool isn't a smart idea – instead, insurers should focus on building a strategy that best weaves automation into the current process landscape. Partnering with a Systems Integrator (SI) could also be helpful, as they would aid in vendor selection, solution road-mapping, and ongoing transformation strategy.

A few insurers have taken significant strides towards intelligently automating their processes. And this goes beyond necessary capabilities like digitizing paper documents. Carriers and tech-innovators are exploring disruptive ways to employ RPA, for example, Aetna's AI engine to settle health insurance claims. Aetna is a managed healthcare company that sells a wide variety of insurance and related services. It recently came out with an AI platform to automate claims settlement.

It can settle a claim overnight, unlocking a projected annual savings of $6 million, compared to the weeks or even months, it would take human agents for the same task.

Also consider the case of Lemonade, a next-generation insurance company that's turning the traditional value chain on its head. Lemonade has successfully made property insurance into a millennial-friendly consumer product, bringing in $57 million in revenues from 425,000 customers, two-thirds of whom are under the age of 35.

Lemonade uses a combination of AI, mobile technology, and advanced analytics to reimagine the customer experience and strengthen fraud protection.

Benefits like these are only a step away for insurers equipped with a well-articulated strategy for automation, factoring in the three aspects of people, processes, and technology holistically. By keeping in mind the five elements discussed, insurers can move beyond the lack of digital maturity and gain from the latest technologies with confidence.

At Birlasoft, we help insurers strategize and implement intelligent automation solutions to drive CX, process efficiencies and workforce productivity. For any requests related to your business problems, product demos, and exploratory workshops, fill out the form below, and we'll get back to you soonest.

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