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The industry is on the verge of a seismic, tech-driven shift. A focus on four areas can position carriers to embrace this change.
Top Use Cases for Automation in Insurance
Thinking of implementing intelligent process automation in the insurance industry? Learn about some insurance use cases that are guaranteed to succeed.
Automation Blog/All publications
Top Use Cases for Automation in the Insurance Industry
October 28, 2021 · 11 min read
During this time of emerging “born-in-tech” insurance providers that are fast to react to changes in the market and in customer behavior, increasing pressure to speed up cycle times, reduce expenses and improve customer experiences becomes the new normal for traditional insurers.
Unfortunately, overflow of routine back-office operations, heavy reliance on manual work, and outdated methods and legacy systems make achieving these goals difficult.
Adoption of intelligent process automation in the insurance industry is believed by many to be the solution to these challenges, and it is already transforming the industry.
How automation transforms insurance
Insurance automation use cases
Benefits of insurance automation
How automation will transform insurance
The Hyper Automation market has been growing at breakneck speed and, according to Gartner, is expected to reach nearly US $600 billion in 2022. While the banking and financial services domain embraced this trend long ago, the adoption of automation in the insurance industry has been much slower. Insurance companies are only starting to launch pilot automation programs, with both RPA (robotic process automation) and Intelligent Automation, and the impact of these technologies on the sector is expected to be enormous. How will automation affect insurance? Here are a few expected outcomes:Impact on employment in insurance. Automation will eliminate many jobs, while also creating new ones. Employees freed from tedious copy-paste and data-entry tasks will be able to deliver more personalized and higher-quality customer service.Technological transformation. Automation tools will be built into existing IT infrastructure to ensure better integration between various systems.Improved and more personalized customer experience. For example, customer onboarding will change as bots can perform time-consuming activities such as anti-money laundering. This technology can help bridge the gap between employees and customers and allow more personalized service.
Hyper Automation or Intelligent Automation in insurance has the potential to help companies transform their business, become more profitable, and better adjust to market changes. However, that can only be achieved when the most valuable automation use cases are selected.
Best use cases for automation in the insurance industry
One of the critical factors for the success of automation in the insurance industry (and any other industry, for that matter) is selecting the correct use cases. There are several common insurance use cases where the implementation of intelligent automation can provide tangible results quickly and offer room to scale in the future. Let’s review some of these use cases and intelligent solutions available.
1. Claims processing
Fast and efficient claims processing is paramount to success for insurance companies — yet it’s often a time-consuming, highly manual process that’s frustrating for both insurers and customers. Typically, claim processing takes several days as insurance agents have to gather and check data from multiple sources, such as:
medical certificates and reports for life/health insurance claims (e.g., Short Term Disability Claims Preparation)
photos of damaged baggage and boarding passes for travel loss claims
police reports, driver’s licenses, and vehicle damage photographs for preparing auto claims (e.g., Repair Quote Approval)
It may take even more time due to human errors, like mismatched financial data or customer details. Such delays may result in the loss of customers and other financial and reputational damage to the company.
Implementing an automated claims processing workflow, including claims intake, assessment, and finally, claims settlement, eliminates friction and cost by combining RPA, machine learning, and human expertise to streamline and speed up claims-related operations.
For example, when processing a First Notice of Loss request, an RPA bot would extract the information from the request and enter it into the claims system. If the claim is complete, a cognitive bot would validate its information and mark it approved for payment. If there is missing data, the task is routed to an agent to perform, and the bot observes how the agent handles this exception and “learns.” When the agent returns the claim to the workflow, a bot automatically sends the verified request for payment.
In another common insurance process, Paper Claims Intake, bots automatically receive paper claims once scanned, classify documents into types, extract key data points, and push the extracted data into the core claims systems — tedious, low-value, manual tasks that qualified employees spend hours on every day.
Automated claims processing reduces the amount of manual work by 80% and improves accuracy significantly, cutting down the time necessary for the process by 50% — which allows companies to process twice as many claims with the same personnel. As a result, customer experience is improved as the back office functions are performed fast and with fewer errors, delays, and annoying back-and-forth communication with customers.
Four ways insurance companies are improving their customer experience
Today's most successful companies build their entire business around the customer. And for the customer, experience equates to loyalty.
Four ways insurance companies are improving their customer experience
By Yoann Michaux | 6 minute read | May 18, 2021
Today’s most successful companies build their entire business around the customer. And for the customer, experience is the single most important factor determining loyalty. According to The State of Connected Customer report, 84% of customers say the experience a company provides is as important as its products or services—and yet, there is a massive divide between customer expectations and what most businesses are actually delivering.
This is also the case with modern insurance companies. For many decades, insurance customers viewed insurance as a commodity product they had to purchase based on what was available. But over the past decade, the market has become saturated with more insurance products and different options, creating a more sophisticated buyer with a large range in needs and wants. To meet these changing needs, insurers need to be nimbler, work faster, and make delivering a superior customer experience (CX) their top priority.
Insurance industry begins the move to a customer centric model
The insurance industry has begun shifting to a consumer-centric model focusing on CX. Eighty-five percent of insurers use CX initiatives throughout the customer journey, and 90% have a C-suite position dedicated to the consumer experience, such as a Chief CX or Chief Customer Officer (CCO).
Other positive changes adopted by many insurers in recent years include:
Adding new channels to communicate with customers for policy questions and claims.
Changing language in documents and communications to use less insurance jargon.
Offering hybrid experiences (human and artificial intelligence, physical and virtual, direct and agent-based).
Engaging with customers daily or throughout the year instead of only at renewal time.
But as a recent report from the IBM Institute of Business Value (IBV) revealed, 42% of customers don’t fully trust their insurer, and most insurers (60%) agree that their organization lacks a CX strategy. This leaves the industry with significant room for improvement.
4 ways insurance companies can improve CX through technology:
Demonstrate the value of customer-shared data
Improving insurance CX through technology largely depends on having accurate data (in as close to real-time as possible) to properly address needs and challenges. As the backbone of their CX initiatives, insurers should focus on gathering data throughout all client-related processes, including purchasing, renewals and claims. With access to the right data at the right time, insurers can create more personalized insurance policies and experiences even when the interaction is digital. This in turn increases trust and the likelihood customers will voluntarily share more data in the future.
In addition to communicating the benefits of sharing both consumer and insurance-related data and providing transparency for how the data is used, insurers should specifically invite customers to share data across all interactions, and make it as easy as possible for them to do so. For instance, customers are more likely to share additional information if they aren’t required to repeat something they provided in the past. By pre-filling information already obtained, you can focus on deepening the understanding of your customer by asking net new data.
The data already available in-house can also be mined and enriched through open data platforms and customer-centric analytics, to generate insights, analyze patterns and behaviors, and understand buyer’s values and triggers, etc.
Lastly, leveraging research methodologies as part of an experience design, and creating feedback options to gather real-time sentiment at key decision points throughout the insurance journey is also key to data gathering, and building the most accurate understanding of a customer.
Increase the use of AI throughout the process end-to-end
Infusing AI throughout the insurance customer journey can significantly increase customer satisfaction and retention, according to the IBV report. By starting with deep industry expertise and AI-based tools, companies will benefit from increased speed, accuracy and efficiency. Further, the increased productivity opens up more time for insurers to develop the personal connections customers are looking for when making insurance decisions.
A case in point is the IFFCO Tokio General Insurance Company, which needed to improve its claim processes after learning that up to 30% of its customers were not satisfied with the assessment of their claims. The insurer implemented an AI-based Claim Damage Assessment Tool (CDAT) that uses advanced computer vision and deep neural network-based techniques to assess vehicle damage from images customers upload using an app. By using AI, IFFCO Tokio General customer claims were settled from beginning to end in 15 minutes instead of 3 to 4 hours, and processing costs decreased by 30%.
Create intelligent workflows for both the agent and the policyholder
Insurers are starting to recognize the value of redesigning their systems and processes, and building intelligent workflows that pair data with AI, straight through procession, automation, etc. to embed exponential technology at every step of the process. Integrating functions across organizational boundaries empowers employees and allows customers to feel known, be served faster, and get instant policy refunds or claim payouts Further, automating and integrating tasks can result in innovative ideas that convert into business value.