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The insurance industry is facing a handful of challenges this year, from talent shortages and environmental factors to the never-ending technological revolution. In the abundance of new and innovative automation tools, choosing the right direction may present difficulties. In fact, the insurance sector has a unique set of obstacles that complicate the adoption of cutting-edge technology. Not only is it a business prone to risks and errors, but also a fast-paced sector that requires the ability to quickly adapt.
Robotic process automation (RPA) is a technology that does not demand invasive integrations or revamping of existing systems. It’s a tool that builds upon your current infrastructure replicating already established business processes. In this article, we’ll discuss RPA in insurance, explore how it can benefit your company, and discover use cases that showcase its applications.
Robotic process automation (RPA) is a technology that can emulate human actions and patterns when it comes to interacting with legacy systems. RPA tools can learn from humans by recording their actions and generating scripts that the bot can follow to perform the same task. The script captures every click, movement, and entry allowing bots to replicate them to achieve a certain goal.
Unlike humans, who excel at analytical reasoning, creative ideation, and critical thinking, bots are best at performing repetitive tasks. Moreover, research shows that routine actions are the downfall of creativity and individuality. Doing things in the same way triggers a heuristics response where people rely on shortcuts to reach a solution quickly and efficiently. Although a helpful mechanism, it does limit our abilities to think outside the box.
This autopilot way of performing tasks paired with the lack of stimuli eventually kills your employees’ analytical and creative thinking, which is detrimental to the company’s success. RPA is a relatively simple technology that can prevent this from happening and give you a competitive edge. The insurance industry has recognized the potential of robotic process automation and adopted the technology to handle rule-based tasks. From data entry and processing and compliance regulations to fraud detection, RPA in insurance is a fast-growing trend.
RPA in the insurance industry can automate and streamline a plethora of routine tasks such as report generation, policy administration, claims verification, and many others. In this part, we’ll investigate how insurance robotic process automation can empower insurers and benefit policyholders.
Insurance is an industry that is built on risk assessment and evaluation. The entire sector is designed to estimate risks, calculate their probability and implications, and develop a policy that benefits both the insurer and the insured. However, the underwriting process requires a lot of manual processes, such as collecting relevant data, evaluating the risks, and identifying the appropriate pricing and terms.
Even minor errors can lead to devastating outcomes for everyone involved making the insurance industry highly vulnerable. Mastering risk management is only possible with bulletproof and comprehensive data. RPA in insurance can deliver bots that take over the manual tasks enabling underwriters to make data-driven decisions.
Whether due to the slowing down of the economy, current investment challenges, or increasing competition, experts believe that the insurance industry is becoming more and more competitive. If your customer goes through a negative experience, they’ll likely change their insurance provider altogether. Adopting a customer-centric approach is the best way to stand out and enhance customer satisfaction.
Using RPA in insurance, companies can deliver personalized services that meet the unique needs of each customer. RPA tools can analyze customer data and come up with a tailored plan and coverage that suits the specific person. A high level of customizability enables you to guarantee customer satisfaction and improve retention.
Regulatory compliance in the insurance industry is an extremely tricky and unpredictable topic. Rules and regulations change depending on your location, technology, economic situation, and current political agenda. At the same time, failure to comply with the latest requirements may cost you your finances, customer base, and reputation.
Enterprise RPA systems continuously collect and analyze data to ensure your agency is up-to-date with the recent developments. In case of a potential non-compliance, your tool can inform you in real-time allowing you to fix the issue before it escalates.
With half of US car owners looking for a new insurance provider due to unattainable pricing options, creating a cost-efficient environment is the highest priority. The unstable economic situation in the world in conjunction with the hardening of regulatory compliance and increasing operational costs is forcing the insurance industry companies to set their prices higher.
RPA in insurance can aid firms in operating more cost-effectively and reducing expenses for their clients. Such systems can analyze your data and identify opportunities for growth as well as weak spots that drain your money.
Which processes can an insurance provider automate using RPA capabilities? In this section, we’ll explore several tasks and goals that can be completed with the adoption of software robots.
Let’s begin by taking a look at the most common mundane tasks that every insurance vendor has to deal with, including claims management, underwriting, and policy administration.
Insurance claims are official requests for compensation for a loss, damage, and any other policy event. An average insurance company handles thousands of claims, from data sourcing and analysis to calculation and settlement. Performing these steps manually is a time-consuming task requiring significant effort and resources. Moreover, human-operated mundane processes are incredibly error-prone and unreliable.
Robotic process automation in the insurance industry can be used to streamline the entire workflow, from data entry to status updates. RPA bots can extract meaningful information from policies, reports, and customer data and generate an accurate and fair settlement. As a result, policyholders can enjoy a much shorter processing time and get reimbursed sooner.
Underwriting involves evaluating the risks of insuring a customer to protect the agency and its investors as well as banks and other financial institutions. The process includes a comprehensive risk analysis to develop an appropriate policy for each unique case. From gathering information, analyzing data, and determining the risks to creating a policy, underwriting is a lengthy procedure taking a few weeks.
RPA in the insurance sector can take over the underwriting tasks minimizing the chances for errors. Instead of manually going through medical records or policy clauses to collect exhaustive data, employees can delegate to software bots. Not only will it protect you from mistakes and miscalculations, it will also allow employees more time to focus on more complex and analytical issues.
While the majority of insurance companies rely on legacy systems, research shows that upgrading your IT infrastructure can increase your productivity by 40%. Current policy administration systems have been in use for decades, slowly becoming a hindrance to your growth and innovation. Meanwhile, the needs of consumers are growing, making the insurance industry more competitive.
Using RPA in insurance, organizations can automate policy management activities like renewals, endorsements, and terminations. It can also handle a bulk of administrative tasks such as credit control, taxes, and risk assessment. As a result, your customers will benefit from faster processing time, flawless policy execution, and more accurate outcomes.
In this part, we’ll focus on securing your data, money, and reputation using RPA systems. The insurance industry is prone to numerous risks due to its sensitive nature. Let’s explore how RPA bots can protect your assets and streamline workflows.
With the insurance sector losing over $300 billion on fraud every year, fraud detection is among the biggest priorities. Moreover, between 10% and 20% of insurance claims are fraudulent, making the issue much more critical. Insurance fraud can occur at any stage of the process, including purchasing, selling, and underwriting of claims, and can be initiated by both parties—the insurance company and the policyholder.
RPA systems cannot be bribed or corrupted, making them the perfect arbiter of insurance claims. By analyzing numerous claims and policies, bots can identify fraud patterns and alert personnel. Tools for RPA in insurance can swiftly consume large volumes of data and determine whether the claim carries any potentially fraudulent intention.
The insurance business relies on strict guidelines for documentation, reporting, and auditing to ensure the security of data and finances. While regulations are becoming more and more vast and complex, the consequences of non-compliance remain quite drastic. At the same time, adhering to nuanced and diverse rules is a challenging task requiring multiple tedious processes.
Insurance automation through robotic process automation improves companies’ regulatory procedures and allows employees the freedom to focus on core business goals. Verifying and cross-checking customer data, updating systems in line with current regulations, and generating reports are much faster with a trained bot. On top of that, RPA implementation reduces potential errors and discrepancies, further protecting you from expensive outcomes of non-compliance.
While insurance companies are already overwhelmed with claims processing, a natural disaster may completely devastate the workload. Natural disasters are a relatively rare occurrence, yet they can affect several policyholders at the same time. Such a surge in customer requests can slow down the entire workflow, requiring immediate assistance, resource allocation, and expertise.
RPA in insurance can support your agency at this difficult time, taking charge of client outreach, claims processing, and other pertinent business operations. Automating repetitive tasks enables insurance providers to respond more effectively to disasters, enhance customer experience, and minimize the overall impact.
Finally, deriving actionable insights without advanced analytics is virtually impossible. Extracting data and making intelligent decisions is possible with the RPA capabilities.
Actuarial analysis is a process of ensuring the insurance company possesses enough assets to generate timely payouts as per current policies. A complex investigation that requires in-depth financial expertise and reliable data, actuarial analysis is an essential part of any insurance business.
Automated processes in actuarial analysis span from data collection and manipulation to the assessment itself. Software bots can pull relevant data from multiple sources, perform necessary calculations, and execute tests to generate appropriate pricing and rates. Using data analytics and RPA, companies can accelerate product development and make their pricing models more attractive and competitive.
The main purpose of performing business analytics is to identify opportunities to improve the operational efficiency and productivity of the business. Every organization juggles a myriad of processes and tasks that need to align and facilitate increased sales, better customer experience, and a positive reputation. Capturing and tracking of business processes is hindered by the abundance and complexity of modern organizations.
Using RPA in insurance allows companies to streamline administrative tasks, automate tedious activities, and unlock potential for growth and expansion. Having access to large amounts of data and deriving meaningful insights allows you to implement business processes automation and robotize many mundane tasks. Once the company works like a well-oiled machine, you can explore new opportunities and take the next steps.
How does one execute the RPA implementation without running into major issues? In this section, we’ll go over expert tips that will guide you through this tumultuous process.
The inception of adopting RPA in insurance is a process in and of itself and requires careful planning and foresight. First and foremost, align RPA with strategic goals to create a clear scenario for your employees and investors to follow. Identifying the most crucial objectives like increasing customer satisfaction or improving operational efficiency allows you to select the right automation tools and secure a tangible return.
Additionally, this step requires a proof of concept of a sort where you apply RPA to a select process to showcase the efficacy and bring stakeholders on board. Based on this single process, you can extrapolate your success and prove that other tasks can also benefit from RPA implementation.
Next, establish a center of excellence (CoE), a team responsible for executing the RPA transformation. They will oversee the design and development of your automation projects and share best practices across the company. The CoE team is in charge of creating policies, standards, and guidelines for successful adoption and maintaining said procedures. Centralization of RPA prowess and decision-making enables organizations to ensure consistency and transparency.
The best case studies for RPA in insurance are rule-based processes that follow a predefined set of steps and guidelines. These span from simple data input and creating audit trails to complex handling of customer queries and ensuring regulatory compliance. Take a task, break it down to subtasks, and identify which actions can be easily delegated to a bot. This way, you will be able to learn from your mistakes, refine your approach, and gradually scale up the automation throughout the organization.
There are three well-renowned RPA vendors: namely UiPath, Automation Anywhere, and Blue Prism. However, RPA for insurance often demands further customization and refinement to perfectly cover your needs. Consider partnering up with a reliable IT agency to guarantee a flawless adoption and execution of your RPA systems. Make sure your future partner showcases sufficient experience in the insurance industry and provides a comprehensive portfolio of success stories.
Before going through the robotic process automation implementation process, you have to clean and organize your data for the maximum impact. Using unstructured data with corrupted files, duplications, and mistakes will not yield any tangible and usable results. Try to standardize data formats across the company and create a template that an RPA bot can easily follow.
RPA is a relatively non-invasive technology that allows you to preserve the existing infrastructure and build upon it. Integrate your bots into the current systems, applications, and data sources to achieve a scalable yet user-friendly automation environment. This step will help avoid costly disruptions to the ongoing insurance operations and maximize ROI.
In conjunction with RPA, explore other advanced technologies like artificial intelligence, machine learning, and natural language processing to empower your bots. This combination will offer you additional capabilities such as scanning and processing handwritten documentation or performing more complex underwriting calculations. Intelligent automation is key to reaching greater efficiency and unlocking new business benefits.
Invest your resources into change management to communicate the benefits of robotic process automation to your employees. Provide comprehensive training and support to ensure a smooth transition and address concerns. Among the most persistent concerns is the fear of job displacement. It’s imperative to handle them head-on and convey that RPA adoption will allow them more time to focus on complex tasks and will not replace them altogether.
As great as RPA is today, it’s just the beginning of the automation revolution. Let’s discover the trends of robotic process automation in insurance and learn what to expect from the technology in the near future.
Hyperautomation involves maximizing your automation capabilities to their fullest. By integrating RPA with artificial intelligence, machine learning, and other cutting-edge technologies, you can potentially automate complex procedures. From detecting fraudulent behavior, enhancing customer experience, and streamlining high-risk claim verification, hyperautomation can deliver a fully autonomous insurance vendor at low costs.
The Internet of Things (IoT) is another tool among the emerging technologies that can optimize the insurance value chain. Potentially, companies will be able to install smart sensors in customers’ homes and vehicles to capture real-time data about their health. Having access to the most accurate information about the insured items will allow you to generate more precise policies and reduce costs.
By further relying on RPA, AI, ML, and other technologies, insurance providers will be able to make predictions about the insured. Based on customer behavior and patterns, they will be capable of proactive risk assessment.
Soon enough, companies will be able to integrate intelligent document processing systems to automate data extraction and analysis. For instance, you can automatically scan physical documents, capture the contents, and derive the important bits without any human intervention.
Basically, RPA systems will be capable of monitoring your current bots and analyzing their performance. Using these insights, you can make changes to the existing system and empower your bots to be more efficient and precise.
When adopting a new technology, a lot can go wrong. For this reason, choosing the right IT partner is arguably the most important step of the process. NIX is a software development company with decades of experience in helping clients navigate digital transformation. Our RPA case study showcases the entire project and summarizes how we implemented the technology to help the client reach their goals.
If you’re interested in implementing RPA to automate your tasks and unlock business growth, get in touch with our experts at NIX. Our seasoned RPA specialists will help you adopt the technology, choose the right processes to automate, and derive invaluable insights from your data.
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