The Impact of RPA for Life Insurance
July 20, 2016 by Anne-Frances Hutchinson
Accessing meaningful data within existing siloed systems is one of the biggest issues for traditional life insurance companies. Dredging data from legacy systems often translates into lengthy cycle times and higher costs – with zero guarantees that the extracted data will be of decent quality – so it’s no wonder that Insurers are looking towards Robotics Process Automation (RPA) for solutions.
Software developer and insurance industry expert Michael de Waal sums up the need for automation in the underwriting process this way: “…with large quantities of applications, increasingly stringent underwriting standards and the sheer volume of information we now have access to — including big data — it’s difficult for human underwriters to keep up, analyze data and sift through the irrelevant to find the relevant. It’s like trying to drink water from a firehose.” Partial automation can help human underwriters increase efficiency, as it enables them to bypass irrelevant data and the resulting information overload. Many companies offering simplified-issue products are already taking advantage of the total solution software packages now on the market.
“Automated underwriting can be configured to notify human underwriters when certain red flags are found. It can score applications based on rules — regarding medical history or concerning drug combinations or third-party information that wasn’t mentioned on the application. It can then route the application to a specified team of underwriters based on the initial risk assessment or send to “jet issue” if deemed “clean,”” de Waal writes.
In “Six Trends in Holistic Insurance Automation,” analysts at Accenture offer these realizations about RPA
1: The robots are here. The Institute for Robotics Process Automation defines RPA as “application of technology that allows employees in a company to configure computer software or a “robot” to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems.” For insurance, RPA technologies can help classify images for claims processing or run text analytics for better customer service.
2: Welcome, scalability. “Properly implemented, automation programs enable the scalable, flexible and responsive insurance workforce that is so essential in a digital marketplace. Freed from routine process activities by their new automated co-workers, back-office staff can be redeployed into front-office roles where they can focus on complex customer demands and help generate growth,” the report states.
3: Pilot first, then fly. According to the report, “RPA pilots have demonstrated a 40-80 percent reduction in processing times, along with improvements in quality, auditability and risk management.”
4: Pick your processes with care. “Swivel chair” processes -- highly repetitive, manual tasks that require limited human intervention are ideal targets for automation. Accenture also notes that
“Insurers are finding that RPA can have a major impact in back-office functions such as applications handling, claims processing and data entry.” The big benefit here: lowering operational risk and creating a better customer experience.
5: Don’t skimp on the internal SWOT analysis. Different departments will react differently to the addition of robots to the workday mix. Ops staff may see technology as either “smart technology empowering smart people,” or as a threat to their jobs. The front office is more likely top view automation in a positive light. “However,” warns the report, “it’s in the middle- and back-office operations, where RPA has the greatest potential to automate manual activities, that there’s likely to be the most uncertainty.”
6: Manage the transition. RPA will streamline operations, and as a result, slim down the number of roles available for ops staff. “Insurers, therefore, need to focus on retaining and redeploying talent to support front-office activities or new roles created through business growth.”
Automation can turn hard-to-reach data into high quality business critical information. Visit our Insurance Offerings Page to find out how Captricity can help you get your hands on the customer data you need to innovate, grow, and thrive.