The Case for Robotic Process Automation (RPA) in Insurance

5 min read

Discover how robotic process automation (RPA) is changing the insurance industry, where it’s in use and how to deploy it for new efficiencies in your own organization.

Robotic process automation (RPA) — which is the use of software bots to handle routine keystroke-level tasks — is more important than ever in the insurance industry. In fact, Novarica research shows that more than half of all insurers have deployed RPA, compared to less than a quarter in 2018. [1]

From underwriting and onboarding to policyholder services and claims processing, RPA is changing the way that insurers do business. By freeing up employees from time-consuming manual tasks, insurers are driving efficiency, speeding up processes and creating better customer experiences. Here’s a closer look into the business case for RPA.

What is robotic process automation in insurance?

In insurance, RPA refers to the use of rules-based, low-code software “bots” to handle the repetitive tasks of human workers, such as collecting customer information, extracting data in claims, performing background checks and so on. RPA is part of the greater trend of hyperautomation, enabling organizations to transform processes to be more competitive.

The value of RPA in insurance

RPA streamlines the everyday business processes that drain workers’ time, energy and morale. By deploying RPA bots across multiple systems, insurers can improve accuracy and efficiency, freeing up human resources for more strategic tasks. Case studies have shown up to a 200% increase in ROI within the first year of RPA deployment in financial services.

Insurance companies rely on a mix of legacy applications and systems. RPA can help link these disparate systems — with minimal coding — so insurers can conduct operations faster, reduce labor costs and explore new areas of business innovation. In fact, Gartner predicts that by 2025, 70% of new applications written by enterprises will use low-code or no-code technologies. [2]

How RPA works in insurance

RPA bridges the gap between legacy insurance systems in a way that improves the customer experience and operational efficiency. Specifically, RPA platforms can process actions right down to the mouse and keyboard levels, while also integrating with systems at a lower level via application programming interfaces (APIs). Organizations can use API connectors when building their workflows with RPA for end-to-end automation.

Perfect for a distributed workforce, RPA solutions can do the following:

  • Copy and paste data between different applications
  • Open emails, gather data and move it into a core system
  • Calculate data to create month-end profitability reports
  • Integrate with workflow automation, rules engines and other components for fully automated processes
  • Use artificial intelligence (AI) add-ons to enhance bot capabilities

The benefits of RPA in insurance

With an RPA implementation, insurers can improve back-office processes and customer-facing services, while also transforming the work environment. After all, employees shouldn’t have to be stuck with mindless data entry.

Some key benefits of using RPA for insurance operations include the following:

  • Faster insurance claims processing: In traditional claims processing, employees gather information from various documents and move it into other systems. Now, RPA bots can move large amounts of claims data with just one click, so customers get a faster response when they file a claim.
  • Higher customer satisfaction: Insurers can speed up a wide range of data-rich processes with RPA, from new business onboarding to policy cancellations. RPA can toggle through multiple systems and automatically move data, saving human effort and meeting customers’ needs.
  • Increased data accuracy: By replacing manual processes with RPA, insurers can remove the potential for human errors. RPA increases the reliability of data, which is especially important for regulatory compliance.
  • Rapid cost savings: RPA is a great way to streamline business operations, increasing productivity for overall cost savings. Plus, companies can reallocate teams to higher priority work and drive business growth.
  • Investment protection: Robots can extend the life of legacy systems that might be replaced within a few years and then be updated to work with new systems. They can be configured much faster than traditional IT projects.
  • Cross-selling opportunities: RPA tools like chatbots can deliver customized product recommendations to enhance the customer experience. Plus, RPA can be used for new business innovations, such as instantly customizable life insurance and on-demand property coverage.
  • Improved job satisfaction: RPA bots use intelligent document processing to eliminate a wide range of manual data entry tasks so employees can perform more value-added activities. This leads to higher morale across the organization.

Use cases for RPA in insurance

RPA is already helping insurance companies improve a wide range of data processing tasks:

  • Claims management: RPA bots can streamline the entire claims journey from First Notice of Loss (FNOL) to adjustment and settlement. By automating their high-volume claims filing processes, insurers can free up their claims inspectors for resolving key issues and exceptions. Standard claims get handled within minutes, while employees focus on the issues that matter for the business.
  • Underwriting: Traditionally, underwriters need to analyze multiple data sources to determine risks and get clients the appropriate rates and policies for their needs. RPA bots can automatically collect unstructured data from internal and external sources and present it on a central dashboard for faster decision-making.
  • Call center support: Digital workers can support those who support customers. For example, agents can use attended bots or chatbots to address service requests in real-time. RPA bots can quickly aggregate customer and product information, enhance employee collaboration and increase policyholder retention.
  • Registration form handling: The integration of optical character recognition (OCR) with RPA enables insurers to automatically interpret content from registration forms and direct the information into the appropriate work streams. This increases accuracy and data quality, while reducing insurance backlogs.
  • Policy administration: Insurance brokers can create more engaging experiences with policyholders, backed by RPA. Using a mix of machine learning, natural language processing, intelligent OCR and analytics, RPA solutions can identify the context of customer emails and classify the content. They can extract data, update systems, interact with human users to complete instructions and deliver confirmations — all while meeting regulatory and statutory requirements.
  • Product innovation: Insurers are using RPA to support new types of products and services, such as on-demand quotes, policy management apps and customer portals. For example, premiums can be based on the individual customer’s past driving behavior. Or, images of vehicle damage can be automatically analyzed for faster auto insurance claims, without needing an adjustor visit.

RPA in insurance and IBM

IBM is building the industry’s most comprehensive suite of AI-powered Automation capabilities. With IBM Robotic Process Automation, insurers like Lojacorr Network can automate more business and IT processes at scale with the ease and speed of traditional RPA. Software robots, or bots, can act on AI insights to complete tasks with no lag time and accelerate digital transformation.

Get IBM Robotic Process Automation as part of the IBM Cloud Pak for Business Automation. To learn more, explore "RPA: A no-hype buyer’s guide" and sign up for the no-cost, IBM Robotic Process Automation software trial.

[1] Novarica Research Council, “Emerging Technology in Insurance: AI, Big Data, Chatbots, IoT, RPA, and More,” January 2021.

[2] Gartner, “Predicts 2021: Accelerate Results Beyond RPA to Hyperautomation,” December 4, 2020.

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