5 Impactful Ways IPA is Disrupting the Insurance Industry
The use of Intelligent Automation (IPA) in insurance is making big waves in a once archaic industry. By operating in a highly regulated environment with demanding clients, insurers advocate the introduction of artificial intelligence into their daily processes.
To gain a competitive advantage, several insurers have already deployed an automation strategy in areas like new Business Processing, Claims Processing, and Finance. The insurance industry is currently intensively evaluating use cases for intelligent automation in order to increase the efficiency of current processes and thus reduce operating costs.
According to McKinsey: “IPA can cut the cost of insurance claims processing by up to 30% and a large insurer could more than double profits over 5 years by digitizing existing business.” On that note, let’s quickly understand how IPA is disrupting the insurance industry.
1. Digitally powering a changing insurance landscape
The insurance market has become competitive and more robust in recent years with the arrival of online P2P insurers, technology operators, and insurance players. While digitization in the insurance sector is bound to create opportunities, it also presents new challenges for traditional players.
With low-interest rate scenarios, the income streams of old insurance companies quickly dry up, as premiums from clients investing in different financial institutions do not pay the same returns as in recent years. In the future, these challenges may increase, due to the rapid pace of digitization and changing customer preferences.
However, insurers who have taken the pulse of the digital revolution and innovated their products and value chain have grown.
2. Analyzing operations and optimizing business processes
The insurance industry is taking an approach where it holistically implements intelligent process automation more effectively to improve its performance.
The whole approach is to analyze end-to-end operations and find new and efficient ways to use automation technologies to optimize business processes. The technology not only liberates the employees from the hassle of doing repetitive, paper-based tasks but focuses more on people-oriented tasks and helps in delivering personalized, top-quality customer service backed by complicated and real-time data profiles.
IPA can be effectively utilized by insurance companies to scan photographs and analyze and clear damage or settlements in a more effective and quick manner. Nowadays, the use of high-end voice technologies can help bring down the insurance settlement error rates to about 6 percent (which equals that of an average human). The combination of voice analysis and image recognition technology can help an insurer reduce the challenges or complexities associated with adjusting and assessing claims.
3. Addressing challenges faced by the insurance industry
Insurance companies face multiple challenges in this increasingly digitized world. Here are some of the main hurdles insurers face:
Insurers suffer from tedious, prolonged, and tiresome activities like collecting and entering data which is done by humans. These processes are expensive, prone to inaccuracies due to human error, and result in slow response times.
Accommodates Strict Regulatory Standards
Operating in multiple regulatory jurisdictions, insurers must adhere to evolving rules regarding capital regulation, transparency, reporting, and interactions with clients. Insurance companies can face heavy fines and damage their reputation if they fail to comply.
Legacy Applications and Miscellaneous Systems
Insurers’ banking processes are heavily dependent on legacy systems and software. These programs can no longer meet the needs of modern customers and processes. Companies must invest a large part of their budget and resources to implement new technologies capable of meeting these requirements
Insurers are subject to seasonal peaks which only become more difficult in the event of a large-scale disaster. Such spikes require the complaint process to be efficient and accurate when dealing with a large amount of incoming data.
Increasing Demand for Better Client Service
Today’s insurance customers are tech-savvy and have little patience for bad customer service. They expect transparency, customizable options, and fast response times and are ready to go around a large number of competitors in the market if their needs are not met.
4. Deploying bots for rudimentary decisions
IPA is already changing the way insurance companies operate. The bot’s hardworking workforce not only emulates repetitive, rule-based transactional and administrative tasks but also handles some basic decision-making levels. Experts in the human domain are therefore free to focus on more strategic tasks involving reasoning, judgment, and emotional intelligence.
This digital workforce of bots is getting smarter with Intelligent Automation enabled by transformational technologies like Machine Learning (ML), Computer Vision, Artificial Intelligence (AI), and Natural Language Processing (NLP). Typical areas where intelligent automation makes a huge difference are:
- Policy Administration and Servicing
- Renewal Processing
- Claims Processing
- Regulatory Compliance
- Process and Business Analytics
- Sales and Distribution
- Finance and Accounts
5. Future-proofing the insurance industry
With IPA in the increasingly sophisticated insurance industry, it will provide a cost-effective way to meet rapidly changing regulatory requirements and help businesses focus on long-term strategic issues. AI-based support can reduce documentation times by up to 80%, making insurance companies more profitable.
Today’s businesses need to rethink how they want to use human potential and how much they can trust a computer to run their operations. In this way, one thing becomes clear: human contact will become paramount in the future, especially when robots will perform most of the repetitive and mundane tasks.
Although high-frequency products are digitized and automated to a greater extent, it can be difficult to convert existing policies in this new field, it is not only a technological challenge, but the product must also evolve to meet the needs of current market conditions and regulatory landscape. Insurers will need to consider digitization from a broader perspective that includes product innovation, services, and business models.
Insurers can profit vastly from Intelligent Automation, and those who have already turned to automated solutions are already seeing the impact. By effectively planning and implementing AI solutions, businesses can transform their operations, reduce costs, increase employee engagement, and improve the customer experience.
Futran Solutions has partnered with leaders in the industry (e.g. Automation Anywhere) to provide a solution that is rooted in domain experience, built on a solid foundation, and can be scaled incrementally. We specialize in AI and RPA technologies, however, we understand that the critical success factor for automation programs is the domain knowledge about the processes, and not only the technology.
Futran Solutions has worked with insurtech start-ups as well as global insurance leaders to develop Intelligent Automation solutions for improving business processes. Our team has experience in creating custom automation applications that use visual recognition, machine learning, and other AI tools that simplify the management of routine tasks, whether it’s underwriting, claims processing, or customer experience.
Futran Solutions is a Digital Technology organization focused on Data Analytics, Cloud, Automation, and New Age App Development.