The insurance industry, traditionally cautious, heavily-regulated, slow to adopt innovation and drowning in back office processes, is being faced to evolve quickly. Large-scale mistrust, fierce competition, and increasingly demanding tech-savvy consumers are forcing this sector to work smarter if they want to survive.
Nonetheless, with the rise of digitalisation, insurance companies are still struggling to effectively carry out high volumes of repetitive business processes. This is having a negative impact on insurers’ growth, profit margins and customer satisfaction.
For this reason, intelligent automation has quickly become a game-changer, helping confront some of the most pressing obstacles that insurers face today.
Insurance companies face a myriad of challenges in this increasingly digitised world. Here are just a few of the biggest hurdles insurers face:
Insurers suffer with mundane, time-consuming and tedious tasks such as data-gathering and data entry that are performed by humans. These processes are costly, are prone to inaccuracies due to human error, and result in slow turnaround time.
Operating under multiple regulatory jurisdictions, insurers must comply with ever-evolving rules in capital regulations, transparency, reporting and client interactions. If found non-compliant, insurance companies can face hefty fines and suffer reputational damage.
Insurer’s bank office processes have been heavily reliant on legacy systems and software. These programs can no longer meet the needs of modern-day customers and processes. Companies must invest a large portion of their budget and resources to implement new technologies that can handle these requirements.
Insurers are prone to seasonal peaks that only get more challenging in the event of a large-scale catastrophe. Such peaks require the claims process to be efficient and accurate while processing a vast amount of incoming data.
Today’s insurance customers are mobile and tech-savvy and have little patience for bad customer service. They are quick to shop around at the vast numbers of competitors on the market if their needs are not being met and expect transparency, customisable options and a quick response time.
Intelligent Automation (IA) is the development of computer systems that are able to perform tasks that normally require human intelligence. Intelligent Automation systems can detect and produce mass amounts of information and are able to automate entire processes or workflows, and adapt as they go.
Unlike its non-AI counterpart Robotic Process Automation (RPA), Intelligent Automation can process unstructured data and learn and adapt to variations in data in real time. Both technologies, however, are extremely useful for companies looking to automate tedious, repetitive tasks.
For this reason, insurers are already turning to IA and advanced digital solutions to stay profitable, remain compliant, and enhance the customer experience.
Insurance has become a commoditised industry. If companies want to attract and retain customers, they must focus on the frontend aspects of their business and improve the overall customer experience.
Aside from the obvious cost-savings, intelligent automation provides real benefits that directly or indirectly affect the customer. Some of these benefits include:
Claims processing is a time-consuming, highly manual process that frustrates insurers and customers alike. The process typically takes days as employees must gather and check data from multiple sources such as medical records, identification cards, photos of damaged goods and police reports. It can take even longer due to human-error.
By deploying an automated claims processing system that combines Intelligent Automation and human expertise, insurers can streamline this process by reducing errors, eliminating the need for humans to perform repetitive tasks and decrease turnaround time.
Automating the claims processing workflow can reduce manual labour by up to 80%, allowing companies to process a significantly larger amount of claims with the same amount of staff. As a result, customer experience is improved due to quick responses and less back-and-forth with clients during an already stressful time.
Customers are required to go through a ton of paperwork and fill out and submit numerous forms before signing a contract. Once the insurers receive this information they must analyse it and manually enter it into internal systems. This process can take weeks and in some cases over a month.
With the use of intelligent automation, long waiting times can be significantly reduced by eliminating the need for humans to gather, analyse and cross-check client data (with the exception of any anomalies). This means less errors are made and turnaround times are significantly quicker.
Underwriting requires gathering data from various sources and analysing it to determine and mitigate the risks associated with a policy. The information analysed includes health risks, financial limitations, creditworthiness or duplicate policies.
The underwriting process can take weeks at a time when done by personnel.
With automated solutions, insurers can speed up a number of functions including data collection, populating data fields in internal systems and reviewing a customer’s past claims history and producing recommendations.
In insurance, work documentation and building audit trails follow strict regulations that change frequently. Breach of these rules can result in costly penalties and reputation damage.
Monitoring compliance via internal reviews can mitigate the risk of non-compliance bots whose actions are all logged. This data allows companies to monitor regulatory compliance in real time which can be prepared in the case of external audits.
Intelligent automation also eliminates the need for employees to go through the many manual tasks that often lead to errors and consequently, compliance breaches.
Insurers stand to benefit immensely from Intelligent Automation and those who have already turned to automated solutions are already seeing the impact. By effectively planning for and implementing IA solutions, businesses can transform their operations, reduce costs, boost employee engagement, and improve the customer experience.
Not sure where to start on your Intelligent Automation journey? Take a look at how Nexus FrontierTech’s AI solutions for insurance can help insurers reach their compliance and growth goals. Or get in touch to have one of our representatives reach out for a free consultation.
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