Solution Partner Views
Embracing Bots is the Future of Automation in Insurance
Insurance companies have gotten a bad rap when it comes to their measured approach to adopting new technologies. Not so with robotic process automation (RPA). Insurance companies are embracing “bots” as a way to optimize current processes even as other industries grapple with figuring out the best use of this technology.
Robotic process automation automates repetitive tasks by mimicking a user`s actions. This solution provides immediate benefits particularly attractive to insurance firms. It can be deployed rapidly, improve accuracy, provide flexibility and scalability, capture metrics for
auditability, and help create resource capacity that can be redeployed to customer-focused tasks. Given its highly adaptable and scalable nature, RPA provides the capability to modify and redeploy bots quickly to accommodate process changes or application changes, and the bots can be configured to scale based on demand. Based on those factors, insurance leaders recognize that RPA is a tool for driving efforts in process optimization, resource optimization and improving quality of service.
RPA and Claims Processing
An area where RPA has been put to the test is in claims processing. Carriers have been able to achieve straight through processing (STP) in registration, coverage and investigation, evaluation, and settlement. Throughout the past century, these processes have become cumbersome as insurance companies have grown organically and through acquisitions, which introduced multiple systems to process claims.
With the introduction of RPA, it is possible to optimize insurance processes and let the robots determine which of the various systems to interact with. In other words, an organization may have more than one policy system and a smart bot can determine the policy system that is pertinent to the claim that is being processed.
Bots can be built to execute rules and make decisions. Within the claims lifecycle there are many stages where decisions are driven based on rules. A smart bot, or a team of smart bots, can be built to perform validations, execute rules and make decisions. As the use of bots mature, you will be able to automate the claims lifecycle by orchestrating the various bots to achieve STP, from registration to settlement and close. While complex and major loss claims may still require human intervention, there is an opportunity to address low-risk and high-volume claims through STP. As more and more claims are addressed through STP, the focus will shift to addressing complex and major loss claims in a timely manner, leading to reduced leakage and improved loss ratio.
Incorporating Cognitive Technologies
When you consider end-to-end processes, you may need other technology solutions in addition to bots. Consider the intake ecosystem where you may take in claims requests (first notice of loss) through digital (web and mobile), email, call center, paper, etc. All these intake methods need to transform the information into structured, digitized data for downstream bots to consume. Optical character recognition (OCR) and intelligent character recognition (ICR) are widely used to convert forms intake (including paper) to a structured digital format.
Recently, organizations have been using bots that support NLP (Natural Language Processing) to automate their call centers, which has led the way to total automation of this intake channel. Bots are designed to work cohesively in such ecosystems. Take a holistic view of your end-to-end processes and evaluate available technology capabilities that can help achieve total automation.
As more and more digitized data becomes available, carriers will have more opportunities available to automate processes. Carriers must build automation capabilities as a core competency to keep pace with their peers. The newly developed competencies will enable organizations to build services and solutions focused on their consumers` needs.
On the horizon, cognitive technology with the ability to deal in natural languages, image processing, reasoning, self-learning, judgments, and decision-making using AI technology will soon impact organizations across the insurance industry.
Advancement in image analysis combined with drone technology will completely revolutionize the claims process. In an auto accident claim, the bot will be able to assess the damage and settle the claim based on image analysis of the pictures of the accident or video feed—starting with simple fender bender claims.
Doing RPA Right
While RPA won`t solve all process challenges, there are several best practices for successfully introducing RPA into your organization:
- Treat your RPA initiative as a strategic transformation initiative with support from C-suite.
- Build a collaborative partnership with various functions in your organization and take a long-term view of the benefits.
- Build awareness within the organization by conducting brown bags that will generate momentum and demand for RPA.
- Conduct a macro assessment of all your processes that will help build your automation roadmap based on your organization`s priorities in addition to conducting a POC to evaluate RPA tools.
- Include “soft” as well as “hard” benefits in your business case. Implementing RPA technologies can help you build capacity, create flexible workforces, and increase the quality of service by reallocating resources to address tasks that require reasoning, judgment and customer interaction.
- Start with simple processes that will introduce you to the full lifecycle of creating and managing bots. You will quickly learn that you`ll need more than just business teams to successfully implement and maintain bots; teams like IT, PMO, Change Management, Release Management, HR, Security, Risk, and others.
- Plan to build out a CoE for governance and support. This takes time, as you will have to negotiate with LOB leaders regarding cost allocations and drive consensus to define the target operating model and delivery lifecycle.
- Make your delivery lifecycle more agile. RPA requires it.
- Avoid overlaps. Align with other automation and digital initiatives that are planned in your organization; look for areas where RPA can be used as an integration tool to cut down your timeline.
- Remember that bots need infrastructure to run on. Conduct capacity planning early so you provide enough time for the infrastructure team to stand up the environment as needed.
- Make security front and center. Involve the security team and make sure they approve your approach to access, control, and data management.
RPA is the next step in the automation maturity journey. It represents a human/machine partnership that allows us to more efficiently solve problems. Insurance organizations have already warmed up to the concept of bots completing basic tasks and providing accuracy, flexibility and scalability, which is vital in an industry seeking to optimize customer service, manage claims efficiently and comply with regulatory requirements. Their usage of this technology is laying the cornerstone for the next generation of automation technologies.