- Although artificial intelligence (AI) and machine learning (ML) often hog the limelight in the technological headlines these days, robotic process automation (RPA) has become the ‘go-to’ technology for many companies
- The most common issues in the insurance industry are often caused by the sheer volume of manual tasks that need to be performed, but what if there was an easy solution?
- One of the beauties of RPA is its compatibility with most legacy technologies, another is that it doesn’t require extensive coding skills once in place
- Using software bots to mimic users’ interactions within systems and applications, RPA completes tasks efficiently and accurately
There’s rarely ever a ‘Swiss army knife’ technology that can improve multiple facets of company operations. One such technology that has emerged and become increasingly popular across industries is robotic process automation.
So what can this miraculous, fix-everything technology do?
RPA is able to perform the kind of work that not only lets insurance company employees focus on more necessary tasks, but also improves customer satisfaction, reduces costs and minimizes risk.
Back in 2015, only 13% of organizations surveyed by Deloitte planned to invest in robotic process automation (RPA). But by 2022, it was clear that RPA was here to stay: 74% of respondents were already implementing it, putting it ahead of AI as a more high-priority technology.
The case for introducing more robotic process automation in insurance couldn’t be stronger. As a low-code or no-code solution, RPA reduces operational costs, eliminates the risk of human error, boosts scalability, improves customer retention and more.
At Luxoft, we often turn to RPA to deliver intelligent automation solutions to our clients in insurance and other industries. Today, we’d like to share our experience with you and break down what RPA is, how it works, and how it can transform every step of the insurance process, from claim processing to legacy system management.
What is robotic process automation in insurance?
Robotic process automation, or RPA, is a way to automate specific rule-based, routine business processes using so-called “bots” or “robots.” These bots are applications created with low-code or no-code tools. They execute a set of actions based on a predetermined set of rules.
RPA is one of the technologies fueling the larger hyperautomation trend in the insurance industry in conjunction with other technologies, such as AI and ML.
RPA vs AI: What’s the difference?
RPA tools are designed to automate repetitive, routine tasks. These include data entry and extraction, customer information collection, and data verification.
This is where its major difference from AI lies: RPA can’t find patterns in data and come up with insights into large data sets. In other words, RPA can only execute a set of instructions, while AI can “think about” and “understand” data.
That said, it’s not an either-or choice. AI and RPA can work in tandem in the framework of intelligent automation solutions. For example, you can use RPA to aggregate financial performance data from multiple sources. In turn, AI can take over to predict the next quarter’s results or to identify cost-saving opportunities.
How does robotic process automation in insurance work?
A traditional way to automate a business process often involves a developer/s using the target application’s API or a programming language to build automation scripts. This approach is, however, time consuming and costly, especially for applications that don’t provide APIs for this purpose.
Enter RPA. This insurance automation tool develops a list of actions the bot has to complete by “watching” the user perform the task. To that end, it analyzes the graphic user interface and can repeat the actions directly.
This approach allows virtually any employee to automate repetitive manual tasks, even if they don’t have advanced coding skills. RPA tools are also application-agnostic: since they interact with the graphic user interface, they’re compatible even with decades-old legacy systems.
Here are some of the tasks that can be automated with an RPA tool:
- Copying and pasting data from one application to another
- Gathering data from emails into a core system
- Pulling data into and performing calculations for reports
- Sending reminders and standard information requests
Five reasons why insurance automation is vital for industry players
Let’s explain why insurance companies shouldn’t overlook robotic process automation in their digital transformation journeys.
It enhances business scalability
RPA completes tedious manual tasks in a fraction of the time an employee would need, speeding up entire workflows. For instance, in claim processing, RPA can streamline data extraction and verification so that employees can focus on tasks other than moving data between documents and systems.
This is crucial for spikes in submitted claims that can occur, for example, during a natural disaster, pandemic, etc. The robotic process automation insurance that companies implement can automatically extract data from claims and automate other claim processing tasks. This means that organizations don’t have to increase their headcount to handle an avalanche of claims under such exceptional circumstances.
It reduces operational costs
Robotic process automation in insurance streamlines workflows by automating their tedious, repetitive aspects. This, of course, leads to an increase in productivity and efficiency, allowing organizations to get the most out of their human resources by dedicating them to non-automatable, more value-added tasks.
However, the return on investment from introducing an RPA tool varies significantly, albeit positively. One case study overview found that the ROI could reach between 30% and 200% in the first year.
It mitigates the risk of human error
Human involvement in automatable processes only adds to the ever-present risk of human error. However, RPA can easily eliminate it in routine tasks, such as data entry and extraction.
Reducing the risk of human error isn’t only a positive influence on the overall efficiency of an insurance company. It can also reduce customer churn and help avoid reputational losses. In addition to this, data accuracy is held as one of the cornerstones of regulatory compliance.
It improves customer satisfaction
RPA can speed up various processes, from underwriting and claim processing to policy cancellation, while improving their accuracy. As a consequence, customers receive faster responses to their queries, claims and requests.
This is crucial for customer retention. For instance, one study found that in 18% of cases, negative reviews pose a serious risk of policy cancellation. Introducing RPA can help mitigate the risk of a bad customer experience that may lead to churn.
It paves the way for data analytics
Before data analytics solutions can derive insights from mountains of data, that data has to be aggregated, cleaned up and structured. This is where robotic process automation in insurance comes in. It can:
- Pull data from multiple sources
- Remove duplicates
- Standardize data formats
- Flag incomplete entries
- Organize data according to a pre-determined set of rules
Other intelligent insurance automation technologies can facilitate unstructured data processing as well. For instance, OCR can digitize scanned documents, preparing them for RPA-powered data extraction. Natural language processing can recognize valuable data in customer chatbot queries and add it to the CRM.
It seamlessly integrates with legacy applications
As RPA tools create action lists by interpreting user behavior in the graphic user interface, they are compatible with any software, regardless of the tech stack.
This effectively removes what is often a significant barrier to entry for introducing automation in insurance software. Therefore, with RPA, even companies with decade-old systems can streamline their digital workflows and reap the benefits of automation in insurance described above.
8 ways insurance automation transforms the industry
Let’s now take a closer look at eight specific use cases for robotic process automation in today’s insurance industry.
Insurance automation can accelerate claims management at every step, from the first notice of loss (FNOL) to settlement. Here are several examples of how:
- If the claim process is paper-based, RPA, combined with optical character recognition (OCR) can fully automate data extraction from scanned documents
- RPA can aggregate data from the filed claim, accompanying documents, documents from third parties, and internal software in the claims management system
- RPA can automate data verification partially or fully (depending on the client’s needs), accelerating claim resolution or even automating it completely for standard cases
- Combined with AI and ML, RPA can also be used to identify potentially fraudulent claims
As a result, insurance companies can dedicate their inspectors’ and adjusters’ time to the non-standard, complex claims that actually require human intervention. At the same time, standard claims can be resolved within minutes with automation in insurance, boosting customer satisfaction with the claim processing process.
Underwriting is another process burdened with gathering large volumes of data from multiple sources and verifying it to assess risks and determine appropriate rates. This makes this facet of the insurance work one more transformative use case for automation in insurance.
RPA can change underwriting for the better by automating:
- Pulling customer data from multiple sources into a core system for further analysis (RPA can be used in conjunction with OCR for scanned documents)
- Comparing data in the filed forms against external sources for verification purposes
- Flagging suspicious applications and potential fraud (in combination with artificial intelligence)
- Determining whether a customer qualifies for a specific policy
- Calculating insurance policy rates based on the input data in standard cases
Another application of robotic process automation in insurance lies in policy management. The technology can automate its multiple aspects, such as:
- Generating contracts and other legal documents which can be tailored to each customer
- Updating policies and generating new documents
- Sending policy renewal reminders to customers
- Walking customers through the policy updating or renewing process with an RPA-powered virtual assistant (possible in combination with generative AI)
Data accuracy is a fundamental regulatory requirement that insurance companies must comply with. Implementing robotic process automation in insurance can ensure this by eliminating the risk of human error in data entry and extraction.
But that’s not all. Insurance business process automation tools can generate regulatory reports with just the click of a button. This ensures that employees don’t spend countless hours having to copy and paste data from multiple systems into templates. This allows insurance companies to fulfill their regulatory reporting obligations without dedicating dozens of working hours to this rather tedious process.
Sales and distribution
Using robotic process automation in insurance can also benefit sales teams. For example, RPA can pull together all the relevant data needed for sales, funnel, and other reports, generating them in several clicks. Furthermore, it can continuously update them with new data, automating reporting and enabling well-informed decision-making at all levels.
There’s more it can offer as well. Insurance process automation can also be used to verify regulatory compliance and conduct legal and credit checks. Plus, RPA can automate quotation collection from multiple agents.
Business and process analytics
Combining OCR with robotic process automation in insurance is crucial in digitizing paper documents without hours of manual labor. RPA can then be used to automatically distribute the digitized data to relevant systems, which AI-powered analytics solutions can analyze to derive insights into:
- Cost-saving opportunities
- The company’s financial performance
- Customer behavior, including the risk of policy cancellation
- Possibly fraudulent claims
- Workflow optimization opportunities
This use of multiple technologies — RPA, OCR and AI — in business and process analytics is one example of how intelligent automation in insurance can streamline operations for industry players.
When customers reach out to their insurance providers, they expect a prompt response and a personalized approach. However, only 42% of insurance customers were satisfied with customer support during the pandemic. One figure can help understand why 60% of car insurance providers still have a lengthy query resolution process comprising 10+ steps.
Automation in insurance can streamline customer service in two major ways:
- Combined with artificial intelligence and natural language processing, RPA can power chatbots for automating FNOL, claim processing and common query resolution
- In cases where human assistance is required, RPA is the insurance automation technology that ensures support teams have all the customer data they need at their disposal, allowing them to focus on assisting customers
Legacy estate management
According to McKinsey the median age of IT applications has reached 18 years in the insurance industry. However, reengineering legacy systems is a costly and high-risk endeavor. Other modernization approaches, such as replacing, rewriting and rearchitecting, also come with their own risks and overheads.
There is another way, however: Organizations can extend the life span of a legacy system with automation solutions. For example, streamlining cumbersome workflows without revamping the whole legacy system is one way to use robotic process automation for insurance systems.
As the technology is application-agnostic, RPA tools can provide a shortcut to improving the efficiency of a legacy system without entailing substantial costs. They can also extend legacy application functionality to support new service and product types (e.g., on-demand quotes).
How can Luxoft help you with automation solutions?
At Luxoft, we help insurance companies transform workflows and attain strategic goals with intelligent automation solutions.
To that end, we rely on RPA, low-code and no-code, natural language processing, and artificial intelligence and machine learning technologies. We also work with leading intelligent automation insurance industry platforms, such as:
We are fluent in finding the right automation stack for streamlining workflows in every aspect of insurance company operations, from policy management to fraud management and product building. Our industry and technical expertise allow us to find the right solution for maximizing our clients’ efficiency, optimizing costs and accelerating time to market every time.
Maximize your efficiency with intelligent automation
Ready to supercharge your digital transformation efforts with intelligent automation? Drop us a line, and we’ll get back to you to discuss how we can help you attain your business goals with a SaaS solution or bespoke development.