The insurance industry has traditionally been considered a laggard when it comes to adoption of digital technologies and automation, compared to their banking and financial services cousins. Low frequency of customer contact, limited product innovation, reliance on complex legacy systems and tight regulations have often been cited as reasons for this.
However, in the last couple of years the pace of innovation in the insurance industry has witnessed a surge. Product innovation, expectations of superior experiences by digitally savvy customers, and the emergence of disruptive insurtech companies have forced even traditional insurers to accelerate the pace of technology adoption in order to stay competitive.
Among the technologies that have caught the fancy of insurance technology and business leaders is Robotic Process Automation or RPA for short. RPA involves the deployment of software bots to handle high volume and highly repeatable tasks that are traditionally performed by humans. These tasks can include queries, calculations, document generation, updating of records and transactions and many more.
RPA has a wide range of applications, and are primarily used in the BFSI industries to automate business processes. Specifically, in the insurance industry, RPA could be used in processes such as:
- Underwriting
- Claims Processing
- Onboarding of agents and customers
- Updating customer / agent information
- Handling customer queries and complaints
- Generation of documents and reports
Benefits of RPA include drastic reduction in cycle times, scalability, elimination of human errors or improved accuracy, and substantial cost reduction through replacement / augmentation of human effort with bots. The benefits look so attractive that several traditional insurers have started deploying RPA to automate several tasks. As with any new technology, early adopters have had to contend with several challenges in figuring out the best applications or target business processes for use of RPA.
A report from E&Y (Get Ready For Robots) cites a 30% to 50% failure of initial RPA projects, which speaks of the challenges involved. While there are several reasons that contribute to failures, one of the important reasons is targeting the wrong business process for automation. So how should companies pick and choose processes for RPA?
Suitability of Tasks for RPA
First, be clear on the types of processes and tasks that are suitable for robotic automation. RPA works best in the following situations:
- Highly repetitive tasks: Processes involving highly repetitive manual tasks
- Rules driven: Processes that are performed mechanically in a rule based manner without the need for judgement
- Calculation intensive: Processes calling for intensive calculations or computation that are performed manually
- Multiple compliance checks: Processes where humans need to perform multiple checks to ensure compliance or accuracy
- Human error prone: Processes that are traditionally human error prone and directly impact business through poor customer satisfaction or financial loss
- Cycle time critical: Processes which need to be completed within specified timelines to meet customer expectations or regulatory requirements
Expected Outcomes or Benefits:
Business leaders need to be clear on the expectations they have from the use of RPA. Expectations could be varied such as:
- Cost reduction
- Improved speed / cycle time reduction
- Improved customer satisfaction
- Improved compliance
- Reduction in errors
It is important for business leaders to focus on processes that can deliver the benefits they are seeking. Understanding which process can yield which benefits through automation will require a systematic study of as-is processes and quantification of expected benefits along the dimensions outlined above. If internal resources are not available to carry out such a study, technology solution providers focused on the insurance industry would be an appropriate choice. Providers need to have in depth understanding of the insurance industry processes, in order to be able to make the right recommendations. RPA should not be seen as a technology tool, but as a business transformation tool in this context.
Success and Failure Stories:
Learning from others’ experience is valuable. Look for insurance industry case studies on which processes have been successfully automated by others and the benefits they have experienced. Also understand where they failed and why. Business leaders should tap in to their professional networks to find out others’ experiences. Solution providers in this space will also be able to share their lessons and provide appropriate references on success stories. Push them to share their failure stories as well, as there is much to learn from them.
How much of a process to automate?
This is an important decision to make while choosing RPA for a particular process. If you automate a very small part of a process, the benefits you expect may not be delivered. If you automate too much, implementation can be complex and expensive, thus impacting your RoI. In practice, most successful RPA implementations focus on low value tasks of a process to automate and leave the rest to skilled, thinking humans. This also allows you to maintain a healthy work environment where employees do not feel threatened by automation.
Automation Framework:
Business leaders need a well thought out framework incorporating the above considerations in order to make consistent decisions on which processes to automate and what goals to pursue. Check if your solution provider is capable of bringing not just technical expertise in RPA, but a comprehensive framework that can guide you in your decision making.
The ASTRA framework from Synergy Solutions is one such framework. ASTRA is an award winning framework to understand opportunities for automation and picking the right processes that can deliver quick wins. Benefit accrue from day one and in turn allows businesses to make progressive investments in to automating more complex processes.
Read more about Synergy’s ASTRA framework here.
