Current trends indicate that the market for Robotic Process Automation/ Intelligent Automation, valued at $199.1 million in 2016, is on track to grow at a compound annual growth rate (CAGR) of 60.5 percent through 2024
What is Intelligent Automation in Insurance?
Although it may seem obvious to some, it is important to outline that Intelligent Automation has nothing to do with actual robots or physical machines; it is a virtual concept driven by software that sits on top of insurance systems, applications and infrastructure.
This software robot examines data that is entered into the system. Based on the logic provided by the business users, it makes the same decisions and performs the same type of tasks performed by a human.
The Digital Worker will take a certain action based on the customers details. Example credit score, ask for missing information from the agent or use information from one system to populate another. It can then draw the new information to make logic driven decisions on the next course of action .
In most cases, the digital worker replaces the human for common routine decisions.
Intelligent Automation can be custom configured without the need for any code. This enables business users to set it up without the need for IT implementation. This allows the Intelligent Automation to be deployed quickly, sometimes within a few weeks.
Advantages of Intelligent Automation in the Insurance Industry
Cost Efficiency, enhancing customer experience, Timely service, buying only what’s needed, timely insurance claim pay-out, operational efficiency are the main advantages of adopting Intelligent Automation.
Customer Experience is emerging as a top priority:
o 1 in 3 customers who endure a bad claims experience switched insurers within a year (Source: Forrester)
o 4 in 5 of all shoppers now touch a digital channel at least once throughout their shopping journey (Source: McKinsey)
o 8 out of 10 customer interactions will happen without manual touch by 2022
o Customer Experience is going to be a key differentiator and will overtake the price factor. (Source: The Walker Group)
(Source: Harvard Business Review on Digital Transformation- April 2018)
While all Intelligent Automation conversations start at cost efficiency, the right questions to ask is ” How can Intelligent Automation build “operational efficiency”.
Smooth Customer On-boarding: On-boarding new customers can mean inter-departmental communication and subsequently delays. Compared to human labor, a Digital Worker has been proven to reduce such tasks by as much as 50% within a few weeks, thereby enhancing the on-boarding experience.
Swift Processing of Claims: Claims processing can be a time-consuming process which warrants gathering information from multiple systems. With human workforce this can lead to delays. However, the Digital worker can process large amounts of data swiftly and process claims sooner.
Consistency in process execution: In order for Intelligent Automation / RPA to be implemented, a company’s processes need to be standardized. This stands to increase efficiency and enables the Software Robots to complete their tasks better.
Enhances Accuracy: For the human force, repetitive tasks may lead to errors. For software robots, that isn’t the case. Hence the use of Intelligent Automation increases the precision of data.
Easier Implementation: These Digital workers are easy to use and understand by the employees. They can work with existing technology. Software Robots can be configured on traditional systems that may be phased out, and later configured to work with the new ones.
Configured Compliance: Regulatory compliance is necessary for the success of insurance companies. Since the data accuracy is enhanced with Intelligent Automation and the digital workers maintain logs of their actions, it enables insurance companies to stay prepared for their internal and external audits.
Lower costs are surely achieved through reduced business expenses on FTE, improving efficiency and re-deploying human manpower to building new business. The average ROI period varies from six to nine months.
How Intelligent Automation is being adopted in the Insurance industry globally
A typical use-case is where the “Digital Worker” has been taught to process transactions like a human does through the GUI (Graphical User Interface), following predetermined paths.
Based on business scenarios, documentations and logic fed configured into the Digital Worker, it performs prescribed actions.
Industry Case: Prudential Insurance
Prudential has been in business for 145 years. Based in New Jersey, $58.13 billion in annual revenue , as per its annual report in 2018. They do three basic things: Insurance- Individual, Life and Group, Retirement Solutions, Annuity.
Ann Delmedico, VP of Robotic Process Automation at Prudential Insurance explains how Prudential achieved its 3 main objectives of strategic Growth, enhanced customer Experience and manage costs. Ann explains how when Prudential started out at Robotic Process Automation, discussed what is the “value proposition”, not just industry trends.
They analysed whether or not IA/RPA would fit into their story. The questions that were asked were “What can Intelligent Automation do to meet our objectives of either growth, efficiency or manage costs?”
They knew that IA/RPA could help them with their continuous improvement solutions.
She explains that while Blue Prism really helped them lower their costs, many organisations may choose IA/RPA for reasons other than cost.
Beyond cost, Intelligent Automation can provide value in risk reduction, accuracy, capacity improvement and more.
Processing payment mismatches was one of the first few early processes to be deployed in production. If there is a payment mismatch, the digital worker checks if there are two policies for the same individual. If there is a match between the second policy and the payment amount, they system goes ahead and applies the payment. If that isn’t the case, the digital worker looks for inversion of the policy number erroneously. E.g a 12 instead of a 21 and if that is correct, the automation goes ahead and applies the payment. And if it’s not that either, the system will check for a loan on the policy, and if the delta matches, the amount is applied. If none of these work, they would call the bank.
They started on their IA/RPA journey in July 2016 and within 3 months, the first implementation was deployed! By the end of 2016, Ann reports that 10 processes were automated and resulted in savings of $500,000!
Ann explains how it doesn’t matter where you start with RPA, if it’s rules driven and can be automated, you should go ahead and do it.
Prudential even started off this Happiness Group, where they identified RPA champions who would go ahead and identify processes that could be automated.
Industry Case: Zurich Insurance
A customer-led transformation
“Our industry is in the midst of a profound transformation. Led by what customers need and expect, enabled by digital technologies, we are well positioned to adapt to these changes that will define our business not only today, but also tomorrow.” Mario Greco
Group Chief Executive Officer ( Zurich Insurance)
IA/RPA started at Zurich Insurance with International Insurance Contracts:
As a process, the international insurance contracts were closed in the country of the client’s headquarters, related local policies issued in countries covered by international frame contract.
Prior to IA/RPA, the process was very cumbersome with an average of 330 validations in the International Policy system and an average of 1000 process steps/ sub-steps in the end to end process
Blue Prism started a roll out of five countries to start with and the results were encouraging. At the time of the rollout the robots were running in the United Kingdom and Germany. The old process where the time taken per policy was four to five hours was drastically down to forty minutes to one and a half hours. The effort saved for a straight through process was seventy percent, while for an exception process was twenty to thirty percent
Watch the Zurich Insurance: Policy Issuance Solution to see the case in greater detail and also how they setup of a global center or excellence to maintain consistency in operations.
Industry Case: Fidelity Insurance
Headquartered in Boston, Fidelity serves its customers through 10 regional offices and more than 190 Investor Centers in the United States. With 40,000-plus associates, its global presence spans eight other countries across North America, Europe, Asia, and Australia.
Sandeep Suri, from Fidelity Insurance explains how change is imperative to growth and how we adapt to these changes.
Fidelity had the primary objectives of scale and efficiency. While which product was a consideration, Fidelity decided to go ahead with Blue Prism since it appeared to be closest to what the expectation was.
Blue Prism was also happy to train the employees and help them adapt to this new adoption. With that the idea of RPA that germinated “Scan, Scale & Try” was their methodology. So once this method works across a process, it is then replicated across other processes.
Sandeep outlines that if you want to stay in the game for long and stay ahead of it, it’s important to have a robust infrastructure in place. It’s important to communicate with the employees right from the beginning of the journey. Fidelity started communicating early-on that it would avoid excessive hiring through IA/RPA.
Watch the Fidelity Video
Use Cases Deployed in Insurance Industry:
Intelligent Automation/ Robotic Process Automation is a proven technology accepted worldwide and the insurance industry is a textbook case for RPA and IA implementation to streamline manual, transactional tasks and reduce costs, improve data quality, boost customer service and drive significant improvements in operational efficiency. Some use cases where IA/RPA is deployed are:
Policy Administration & Insurance Reporting – The digital workers ensure end-to end policy data administration and upkeep so your staff put customer-care first without having to worry about Compliance Reporting as digital workers manage automated compliance reporting.
Underwriting- By using machine learning and artificial intelligence, a scalable underwriting software robot can be designed. The system can learn from historical transactions and automate underwriting decisions
Claims management- The digital workers manage and process claims by referencing policy entitlements, straight through resolutions, approvals and escalations as per the configured rules. Automation of insurance processing policies following notification of a death helps your staff to focus on the human touch much needed in times of the loss
Market and Competitive analysis- Realign labor intensive activities of market positioning, offers aggregation and competitor analysis to be performed by your digital workers so you can concentrate on the market differentiation strategy.
Initiation of the IA journey within Insurance
The success of RPA depends on identifying and prioritizing the processes that are ripe for automation.
For instance, post IA/RPA implementation, a contact center saves at least half the amount of time for their claim registration and updation.
Make sure you have a lean process before initiating Intelligent Automation/Robotic Process Automation.
Identify the business criticality of the process before signing up for Intelligent automation.
Prior to Intelligent automation, the No Claims Discount validation process would take 10 minutes. Post IA/RPA, after the details have been uploaded, the digital worker can verify and flag the mismatches within 2 minutes.
Make sure you have a central RPA command center to monitor progress, benefits and interdependencies.
Some other processes include Form Registration and Policy issuance. Wherever you start, make sure you have a dedicated RPA execution team that coordinates with a center of excellence and monitors the progress of the RPA implementation.
So, you’ve looked at your choices and have a solid plan for implementing RPA. Now what?
If your decision is “Hire someone having vast experience in large scale robotics deployments to help you in your IA/RPA journey,” we’re pleased to present a variety of solutions for software robotics in the insurance industry. Interested in unleashing the power of IA/RPA for your insurance company? Feel free to get in touch with us to learn more.