Impact of Robotic Process Automation in the Insurance Industry
Robotic process automation is the latest technological development that has taken the insurance industry by storm. It allows firms to make their business processes increasingly streamlined and efficient as well as significantly improving their capacity to take on a larger quantity of clients. While partial and ad-hoc automation has long existed within the insurance industry, the RPA paradigm reaps far greater benefits.
Robotic Process Automation in Insurance has had the following positive impacts for insurance firms:
Streamlining the Processing of Data:
Insurance firms are saturated with vast amounts of data in various formats every single day including paper as well as electronic versions.
Before RPA this data was required to be tabulated manually by employees before a claim or quote could be processed, taking hours and even days, making it extremely costly. Not only that, manual data entry is susceptible to human error and discrepancies across records.
The use of Robotic Process Automation in Insurance has done away with this loaded task of manual data entry. Automatic data entry and document processing has reduced the time and money spent on similar repetitive tasks and has significantly reduced the inaccuracies present due to human error. This has resulted in a far more speedy, efficient and streamlined claims processing procedure.
Integration of Various Systems and Software
Several insurance firms have continued to rely on traditional systems and software to manage their business processes and when they attempt to integrate new technology or IT systems with these existing ones, they face serious integration issues seldom related to legacy systems (e.g. mainframe) with no or limited API support.
This results in a large effort to replace entire systems or the installation of several support systems resulting in large monetary and resource investments. Hence, the hesitation of most organizations to upgrade their systems in the first place, hindering their performance and development in the long-term.
Robotic Process Automation in insurance is a non-invasive technology and is a suitable alternative to an overhaul of existing applications or costly integration projects relying on traditional enterprise application integration tools or BPM platforms.
This has resulted in the increased trend for upgraded technology and streamlined business processes for most firms in the industry. RPA is compatible with existing legacy systems and requires a much lower level of human or capital investments.
Insurance firms are subject to various types of compliance and privacy regulations. Frequent changes to these laws impact the day-to-day business processes and operating procedures of companies and these business rules may need to be altered to comply with the aforementioned changes.
In order to satisfy these regulatory requirements, insurance firms often need to maintain an audit trail of processes followed to make certain determinations. Regulations also require firms to respond to certain events within a given amount of time.
With Robotic Process Automation in insurance, the software generates a detailed log of every transaction processed, which is accessible in a searchable form. Additionally, by increasing capacity using RPA tools, more cases can be processed in real time reducing the backlog of work that often requires human over-time and associated costs. Overall, firms that implement RPA would be better prepared for any external audits.
In comparison to the human workforce requiring companies to comply with certain employment regulations regarding minimum wage and working hours.
RPA bots work 24/7 and 365 days a year without the human-associated real estate and employment overheads. Additionally, any required increase in process execution capacity can be easily handled by deploying additional robots with no extra cost of training. This offers an excellent short-term cost-saving solution to firms while a certain number of robots can also be activated to focus permanently on long-term growth needs of the firm. This will, in turn, free up individuals from menial, repetitive tasks and allow them to focus on processes that add value to the business such as personalized customer service or research and development.
Impacts of Robotic Process Automation in Insurance: Customer Experience
Since customers are increasingly the main focus of all service industries, it is important to note the impact that the RPA will have on the insurance industry.
ITProPortal iterates that research has shown that the best customer experiences essentially pertain to convenience.
According to the ITProPortal: Regulated industries with high volume and transactional business processes stand to gain significant benefits from the application of RPA. Because of the similar nature of the insurance industry, RPA is very likely to significantly improve the customer experience by expediting and simplifying the claim process and thus making the customer more satisfied with the services. That being said, research also shows that several customers, when deciding upon their preferred service providers for banking facilities, considered the availability of a branch nearby as a significant factor in their choice. This shows that while customers are definitely appeased by convenience, human interaction is also a critical factor whereby customers feel a connection with their service providers. (“Robotic process automation – a new frontier in customer service?”, 2017)
Impact of Robotic Process Automation in Insurance: Long-Term
RPA in industries like insurance is readily being adopted by more and more organizations due to volume increases and the need for highly efficient and expedited processing. RPA is being utilized to automate manual, arduous and time-consuming tasks such as data gathering and data entry. Consequently, Robotic Process Automation in Insurance has allowed the industry to overcome some of its biggest challenges being faced due to the lengthy claims processes and to tackle the inefficiency in their system overtaxing the available resources.
RPA adopters have seen a positive impact with reduced claims processing costs, increased customer satisfaction, enhanced compliance and improved customer service hence resulting in an increase in margin/growth. This is because of the flexible nature of Robotic Process Automation, it will soon penetrate insurance markets all around the world and not only will it be a possible option but will rather become a necessity for those who want to remain at the forefront in a highly competitive industry.