Developing an Effective Automation Strategy in Insurance

Developing an Effective Automation Strategy in Insurance

How should insurers analyze the capabilities of new technologies to determine the best way to improve their processes and realize benefits – with customers in focus? We advise an integrated, customer-centric approach to Intelligent process automation (IPA).

While RPA can be a low-cost tool to achieve quick results, it is not a strategy. Companies that develop a holistic strategy which combines RPA with cognitive technologies, can cut costs now and achieve benefits that position them for success in the years ahead.

Download: An Automation Strategy for Insurers

These are the steps you should include when you aim for IPA:

  • Analyze the process you want to improve holistically. Senior executives making automation decisions need a deep understanding of the process from end to end. Take a customer-centric view of the process whenever possible, so that automation enhances the customer experience. Cognitive technologies are capable of integrating data with insights from behavioral sciences to anticipate and fulfill a customer’s needs. For example, clients interested in self-service can be routed to an online portal, aided by a chatbot powered by ML and natural language processing, while other clients are sent to human agents coached by AI tools. 
  • Analyze how various types of automation can enhance your process. In addition to a deep understanding of the process, executives must also fully know the capabilities of the automation tools on the market. Any insurer considering robotics should evaluate whether it might be enhanced with more sophisticated cognitive tools such as AI or automated case management. 
  • Optimize your process as you automate it. Automating a poorly designed, fragmented process will lead to disappointing results. We have found that roughly one-third of processes being reviewed for automation require changes beforehand. This includes system changes, standardization and consolidation of processes, technology interventions and Lean strategies. 
  • Integrate front- and back-office processes, putting customers at the center. A holistic approach to automation integrates the customer-facing part of a process with the back oce. Automating a process may reduce costs or ease workloads, but it’s important to consider the impact it will have on the customer. 
  • Prioritize your processes in alignment with business priorities. Is growth or cost reduction most important to your company? The top goal for many insurers tackling automation is cutting costs, largely by reducing employees. This minimizes many other automation benefits that can foster long-term growth. Once business objectives are analyzed, an insurer can evaluate which processes are causing the most pain. For P&C insurers, it might be claims; for L&A companies, business intake might be the most important process to tackle first. Consultants or AI tools can help companies determine which processes o‰er the most potential for generating value through automation. 
  • Look beyond cost reduction. Yes, automation can result in dramatic cost savings by reducing headcount and accelerating cycle times. But it also offers a host of other important benefits that can improve profitability and position a company for long-term growth. These include: improving the customer experience with faster, more intuitive service; improving quality through reduction of operational errors and human biases; enabling sales through personalized marketing; and improving compliance reporting with greater data capture. 
  • Establish an automation center of excellence. An automation project should not be done ad hoc, but rather as part of an integrated strategy supported by both the business and IT functions. An automation center of excellence (CoE) will help ensure that automation is just one aspect of a mature continuous improvement strategy. This allows an insurer to take automation to scale instead of hitting a roadblock after automating a few processes.

In our experience, too many insurers see robotics as a silver bullet for reducing headcount and improving profits. For greater benefits, they need to aim higher. Here, we have listed the 4 Must-Have Capabilities for Insurers

Related Publication

How Insurers Can Develop an Intelligent Process Automation Strategy

RPA is just the start; insurers need to holistically embrace more powerful intelligent process automation to improve performance in today’s growth-challenged marketplace.