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Why insurance needs RPA to stay competitive

COVID-19 has added to the immense pressure insurance companies already faced. Robotic process automation can help.
Read time 5min 00sec

While digital transformation has been top of mind for most organisations in South Africa and around the world, the global pandemic has made it an even more urgent priority.

The shock of COVID-19 has meant that many organisations are under severe cost pressures in South Africa, with many organisations experiencing both demand side and supply side challenges which are reducing their revenue and, in some cases, increasing their costs.

With consumers hit by lay-offs and COVID-19 infections, and many businesses being closed due to the pandemic, insurance companies are experiencing a loss of revenue as consumers and businesses cancel their policies.

On the supply side, insurance companies are now experiencing an increased number of COVID-19-related claims, both from consumers and businesses.

Even before the pandemic struck, the insurance industry at large was experiencing market pressures due to the emergence of insurtech, which brings additional competition, demanding regulation requirements, internal product-based silos and disparate legacy systems.

The impact of COVID-19 and existing market pressures is putting insurance companies under immense pressure to transform digitally and remain relevant. Insurance companies are now looking to robotic process automation (RPA) to assist them with digitally transforming their business processes. RPA enables organisations to automate repetitive, mundane, rules-based tasks, with the ability to mimic human behaviour when interacting with software and applications.

Areas within the business where RPA can help are underwriting, claims management, customer service, broker management and finance.

Streamlined underwriting

In underwriting, risk exposure is top of mind with insurers scrambling to understand the true impact of COVID-19.

The information required to score and analyse risk is generally spread across multiple systems and datasets. Information is often contained within scanned documents, making this an extremely manual and tedious exercise that generally takes weeks, if not months.

By providing virtual assistants, customer service agents’ productivity can be increased while reducing call handling times.

RPA, along with its cognitive and artificial intelligence (AI) capabilities, can automate this process to assist underwriters with transforming dark (unstructured) data into structured data, consolidating relevant information, applying rules and aggregating the information into a universal view of COVID-19 exposure.

Claims management is another process where RPA can deliver value. With much of their workforce required to work from home, claims that once took weeks to process are now taking close to a month to process, and some are taking even longer.

RPA provides a platform to firstly aggregate and collect multiple sources of claim data. Once the information is collected, RPA can apply rules and logic to understand the severity of the claim, routing high-value claims to claims managers and − in cases where the claim amount and chances of fraud are low − automatically process the claim and payment to the claimant.

In a fully automated claims process for vehicle insurance, organisations use a combination of RPA, AI and cognitive capabilities to assess the damage of a vehicle by analysing photos sent by the claimant.

The AI models then provide damage scoring algorithms to assess the cost of the damage, providing low, medium and high evaluations.

If the risk evaluation of paying the claim is low, RPA will automatically send a confirmation to the customer informing them of the amount which will be paid for the claim. In cases where the risk evaluation is high, claims will then be routed to a claims agent for processing.

Enhanced customer service

RPA can also add value in customer service. Often, customer service agents are required to interact with multiple back-office systems during a customer call. This can take time and may involve reaching out to a manager for approvals. With attended automation, customer service representatives are provided with a single interactive form.

Behind the scenes, bots interface with legacy and other systems to provide the agent with the information they require to service the customer.

If the agent is processing a claim over a specific value, for example, and needs to obtain an approval before completing the process, a bot can be leveraged to automate the approval process, therefore allowing the agent to remain on the line with the customer while his/her boss is approving the claim.

Based on rules and thresholds, the approval can often be automated by a bot and only in certain cases require the approval of a line manager. By providing virtual assistants, customer service agents’ productivity can be increased while reducing call handling times.

For example, an agent receives a call from an existing customer who wishes to leave or cancel their policy. The call agent captures the customer’s account number in an interactive form, and the digital assistant (bot) then retrieves all of the customer’s policy information, transaction history and household data from multiple back-end systems.

The agent then triggers a request to provide better pricing to the customer; the bot applies pricing scenarios and rules based on the portfolio, and generates a new offer for the customer. If the client is happy with the change, the agent accepts the new policy offer. After acceptance, the bot passes the policy to the underwriting team for approval. Once the approval is received, the agent completes the call and triggers a bot to send the latest policy to the customer.

In the examples mentioned above, it is clear to see the value that can be derived by adding digital workers to the insurance industry. Companies can expect to achieve increased operational efficiency and enhanced customer experiences, without needing additional employees.

The automation possibilities for insurance companies are infinite, and the sooner they start, the better.

Lawrence Smith

KID Group presales solution architect.

Lawrence Smith is KID Group presales solution architect. He is focused on supporting growth in the group’s new robotics division and driving additional Informatica business within Infoflow. Smith has 18 years’ industry experience, architecting solutions for various global customers while working for companies including Automation Anywhere, Informatica, Oracle and Sage Software.

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