Blogs & Articles4 ways automation impacts insurance operations

March 9, 2022

The insurance domain has been slow to adopt to new innovations given the regulations to conduct the business on set principles, complexity of the insurance contracts and significant prevalence of ‘push’ rather than ‘pull’ in sales. The industry however, is slowly opening itself to digitization and automation due to uber personal nature of customer interactions and the opportunities presented by the technological advancements during the past decades.

The adoption, while slow, has been widespread with it going from paperless to digitizing all customer engagements. The key players of the industry are focusing on making the entire journey of the insurance process seamless through the help of technologies like AI, IoT blockchain, etc.

However, for the insurance industry to truly use these technologies, it is important that digitization is kept at the front and center of business. It is only through digitization-at-source, that an insurance business will be able to align the data captured, with the customer journey. Giving enough input for the automation engines to work upon.

In this article today, we are going to look into the different operational areas in an insurance business that gets impacted by automations.

  1. Underwriting

Automated underwriting is a pivotal insurance industry transformation initiative. Underwriting includes collecting and analyzing data insights from varied sources to find and solve the risks attached with the selected policy, for example:

  • Health risks
  • Financial limits
  • Creditworthiness
  • Duplicate policies

The entire process – from data collection to its analysis- can take weeks. The implementation of solutions to automate underwriting will speed up the functions like data gathering, updation of internal systems, assessment of loss runs, review of customer claims history, etc. and help take real-time underwriting decisions.

  1. Policy management

Another insurance use case for automation is the policy management cycle which includes policy issuance and alterations/endorsements and other servicing aspects like loans, surrenders and revivals.

At the policy issuance stage, the pre-underwriting checks are done and the underwriting decisions have already been made. What is left is for the policy to be issued and the information updated in internal systems and communicated to customers. Every stage of the process involves manual work.

Automation during insurance policy servicing can transform document-intensive operations, consisting of processing of the loss run reports, analysis of value reports, communication of the explanations of insurability evidence to the customers, etc. to on-the-go policy issuance.

  1. Claims processing

An efficient and fast claim processing is pivotal for the success of an insurance company. However, the process is extremely time-consuming for both customers and insurers. Usually, the turnaround time for claim processing can be anywhere from several days to a few weeks as the claim assessor/surveyor has to collect and cross-check data from multiple sources like:

  • Medical reports for life/health insurance claims
  • Photographs of damaged bags and boarding passes for travel loss related claims
  • Police reports, vehicle damage photos, driver’s licenses, for auto claims
  • Loss/damage details for property and marine losses

Automation of claims processing lowers the amount of these manual tasks by 80% while improving the accuracy significantly. Moreover, it cuts down the processing time by 50% — which enables the firms to process twice as much claims with the same manpower. The result? Customer experience gets better as claims get settled quicker owing to a faster performance of back office functions.

  1. Regulatory compliance

Insurance companies have to comply with a number of national and global regulations. Any change in these regulations can force them to reorganize their business process in order to adapt and grow. Breach in compliances lead to several operational and financial damages to insurance companies. But automation can help.

One of the compliance-centered process automation use cases is KYC (Know Your Customer). With KYC mandatory in India, digital technology like OCR can help pick the details of customer from image or pdf of their KYC form while automation can help fill the details wherever needed in the system.

How should insurers plan out their automation journey?

The success of insurance process automation efforts depends completely on a well-crafted strategy which is aligned with the business goals.

Timelines and budget are the two key factors for seamless integration of the business processes. Taking these two into account, insurers should consider to plan out the automation journey:

  • Identify and assess the monotonous time-consuming tasks according to a cost-benefit parameter and find the value that automation will bring.
  • Align the automation objective with the business goal.
  • Prepare the best strategy based on the internal capabilities, channel mix,  by collaborating with strategic partners.
  • Accelerate the automation right from the task-level to an end-to-end operating model. Insurance businesses can do it by integrating smart technologies like ML, OCR, etc. to optimize the process.
  • Advocate change management by educating the employees across business departments.

The capabilities of automation in the insurance space are limitless. Automation is the fuel that can transform the operations, radically elevating employee satisfaction, and improving the customer journey.

Across a range of and sometimes even within a firm, there are a variety of processes, in different stages of their digitalization journey, that can use partial or complete automation.

But where should you start the automation process? What are the areas that need end-to-end business process automation in insurance? We can help you. Our process automation experts can help you find answers to all these questions while initiating your insurance automation journey. Contact us today on info@inubesolutions.com.

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