RPA Implementation Transforms Insurance Business: Areas of Applicationby@lu
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RPA Implementation Transforms Insurance Business: Areas of Application

by LucyDecember 1st, 2019
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Robotic Process Automation (RPA) allows businesses to digitalize the variety of operational aspects with software bots. Insurance companies enable exponential growth with advanced data processing and reporting, risk management, customer satisfaction, and human resource management. Only 5 percent of U.S. insurance companies were using RPA for claims submission review in 2018, according to a survey conducted among 44 insurance companies (24 life, 20 P&C) in 2018. Insurance businesses are pioneering the RPA adoption, along with the banking, healthcare, and telecommunications industries.

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Implementation of Robotic Process Automation (RPA), which allows businesses to digitalize the variety of operational aspects with software bots, is gaining momentum nowadays.

According to Gartner, RPA is currently the fastest growing software category. At the end of 2019, its annual revenue will rise by 50% resulting in $1.3 billion, while in 2020, it will hit $1.5 billion. Along with the banking, healthcare, and telecommunications industries, the insurance business is pioneering the RPA adoption. Yet, insurers face technological complexity, leading to uncertainty about ROI and vendor selection. By overcoming this hurdle, insurance companies enable exponential growth with advanced data processing and reporting, risk management, customer satisfaction, and human resource management.

Challenges for Robotics Implementation

Perspectives and indisputable benefits of RPA adoption for insurance businesses leave no room for discussion. Software bots assist in reducing time and labor costs for routine operations, increasing competitiveness, attracting and retaining customers through innovation, and more. Still, the practical side of RPA implementation requires profound validity. 

Usage of robotic process automation (RPA) among insurance companies in the United States in 2018


The survey conducted among 44 U.S. insurance companies (24 life, 20 P&C) in 2018 has shown that only 5 percent were using RPA for claims submission review. Thus, the highest number for the overall software bots adoption was meager.

Why, despite the clear advantages of RPA, companies demonstrate such moderate progress in its integration? 

Complexity of Innovation

When implementing RPA solutions, you don’t need to change the existing technical structure. Robots execute routine processes with no errors. For instance, it helps in lowering operational expenses in the structural divisions of your back office. What you do need is to adjust your employees’ work, which requires effort and conflict resolution skills. Industry conservatism faces the need to distribute IT investments wisely. That is why it might also be hard to decide the optimal stack of operations for RPA digital innovation.

Lack of Strategic Control

Insurers usually use RPA to optimize workflows in separate departments. As a result, there is no strategic vision of how RPA might scale at the organizational level. Teams (underwriting, marketing, actuarial) can cooperate with different vendors. Although such segregation may bring short-term benefits, in the long-term perspective, it will entail extra expenses or provoke hidden pitfalls.

Lack of Proven Cases of Successful Implementation

The novelty of RPA creates a gap between piloting and full-scale adoption. According to EXL and Everest, 4 of 5 P&C insurance companies start scaling robotics automation. Still, the main difficulties arise directly in the implementation. Misalignment with software vendors or in-house tech teams hampers the progress, while the absence of established practices and a few success stories delay the desired result.

All these reasons indicate the uncertainty you might feel about the RPA implementation in spite of the numerous claims that robotics is essential for speeding up business processes. Thus, the economic rationale for RPA use with the specification of application areas becomes vital for tunning your mindset in favor of its adoption.   

Areas of Application

Data & Reporting 

The abundance of large data sets on insurance claims makes a perfect fit for automation with robots.

RPA’s most common application for insurance relates to data processing (Extract-Transform-Load) and providing well-structured control reports. In practice, you can transfer employees dealing with claims submission to the tasks with a higher flow of atypical insurance cases and save 75% of the time.

You might also find RPA applicable for obtaining external data from websites, creating audit trails, sending outputs to your clients, performing data harmonization, and many more. In general, this area of software robot usage reduces the need for manual operations by 90%.

Customer Experience 

Today, cutting-edge businesses center efforts on the customer journey. Software bots significantly boost improvement when it comes to automating all contact center processes, including first notice of loss. This, in turn, eases claim handling and makes it intuitively understandable for the clients.

RPA helps both insurers and customers with underwriting. There is no need to ask hundreds of questions to shape personal auto policy or form a quote. In turn, potential clients get a pleasant experience after the first contact with a company that demonstrates a customer-focused mindset. 

Risk Management

Robotics strengthens the credit, market, model, operational, and underwriting risk management. In conjunction with AI, RPA is able not only to detect but to prevent fraud cases and unplanned expenses. For life insurers, it lowers risks in Asset Liability Analysis, Hedging Strategy, and Modeling.

With the greatest isolation from external influence and advanced means of control and management, RPA implementation becomes a shield for your business. The probability of error is diminished with no human intervention. The rapid development of data analysis will allow creating the most comprehensive insurance portrait of the client. 

The Bottom Line

The key benefits of Robotics Process Automation have already set a new innovational standard for insurers. 

Your teams still process quotes, extract data, make calculations, and collect statistics manually or inefficiently? Develop your vision on the processes to improve, find a reliable software partner, make sure your vendor and your business align with each other and do not hesitate to start RPA implementation.