Insurance automation – How is RPA transforming the Insurance sector?

Sudeep Srivastava June 24, 2024

Millions of people everyday sign up for a multitude of policies for security in the insurance industry. The customers are going all the way up for contextualized and real time conversations with their insurers to get hold of maximum benefits.

As for insurance businesses, the operations are accustomed to marketing realities of low premium and rising cost. However, now the sector is on the edge of inflection where the growth can only be driven by adopting automation in insurance as the future of business is molded by robots.

It is seen that automation in the insurance industry has been slow, incremental, and often failed to meet customer’s expectations. Therefore in order to create innovation in the insurance sector and stand ahead in the competition, businesses need to identify the high volume processes and automate them through RPA (Robotic Process Automation), Artificial Intelligence and Machine learning applications.

Robotic Process Automation in insurance helps market leaders automate time taking tasks such as data entry, record maintenance, transaction facilitation etc. and enhance their workflow. This is probably why RPA for insurance has been expected to take insurtech industry to $261.6 billion by 2026. As for RPA alone, the worldwide RPA market revenue forecasts to amount to over $1202.1 million by 2026.

worldwide RPA market revenue forecasts

With insurance automation, you can digitize insurance, utilize the time to move your business up the value chain, focusing on delivering a better experience to your customers and innovating products. However, for this, you must know how to leverage a well strategized RPA for insurance to implement on your daily business operations.

This article familiarizes you with various whereabouts of automation such as:

What is robotic process automation in insurance?
How does automation work for insurance businesses?
Use cases and benefits of automation in insurance industry
And how can Appinventiv help you with RPA solutions?

So without a further ado, let’s begin our automation journey.

What is Robotic Process Automation in Insurance?

Insurance automation is a process to streamline all insurance processes such as sales, marketing, renewals etc. for efficient working management. One of the most popular automation tools used to automate insurance is RPA.

RPA is a traditional software automation used for tasks like extracting crucial data, navigating systems, sending pre-designed proposals, managing underwriting processes, filtering emails and automatically updating the client’s documents.

According to Gartner’s recent survey, the banking, finance and insurance industry are one of the biggest adopters of RPA, actively investing a total of $2.4 billion on RPA software solutions in 2022.

Also Read- How to choose the right financial software for your business

Why is Insurance Automation Important for Businesses?

Over the years, insurance businesses have realized the importance of forging strong relationships with customers to stay competent and profitable. Hence, turning to automation in insurance is the only key to introduce digital connection with customers.

Infact, you would be surprised to know that automation in insurance can enhance customer perceptions of responsiveness and can free up to 30% of capacity at an enterprise level.

How RPA transforms the customer experience

While RPA is just the first step in insurance automation, businesses also need cognitive capabilities with AI and analytics to function efficiently. Cognitive software tools such as NLP (Natural Language Processing) can turn your insurance business into an intelligent, self processing system.

Apart from this, a few of the benefits that come along with robotics in insurance are:

1. Enterprise scalability

RPA insurance services allow industries to scale growth without the workflow being hampered. By implementing insurance automation to your operations, you can expect:

Accuracy increased by 70-80%
Enhanced speed response delivery by 80%
Business efficiency and profitability

Financial technology experts also believe that companies investing in RPA insurance are likely to get 100% return on investments from the very initial phases.

2. Reduced cost

Insurance businesses are known to manage a large amount of data either manually or through data integration. Either way, RPA insurance is the one stop solution to the digital transformation of business. With better compliance and increased profits, automation in insurance can save tons for businesses investing in various platform solutions and software.

3. Reduced human error

Errors in insurance business cost a lot of money. Insurance businesses that continue to let human error affect the operation strategy are more likely to lose customers and struggle with brand reputation.

RPA automation software can help you manage the increasing demands of policyholders and customers with a transparent and automated system. This lets you serve your customers with less or no errors.

Also read- How can automation be used to ensure security and compliance in business?

4. Sales growth

If you are looking to move forward with sales, RPA for insurance is the best way to go. It improves the data processing capabilities and provides insights that help sales people reach the right people and eventually drive sales over time.

Intelligent automation in insurance also helps businesses with pre-qualification, policy management, regulatory compliance, claims processing etc. without missing any details.

How Does RPA Work for the Insurance Industry?

Insurance companies rely on a mix of legacy applications and systems. RPA helps businesses link these disparate systems with minimal coding to conduct faster operations and reduce labor cost.

How RPA works in insurance sector

RPA in the insurance industry is known to bridge the gap between legacy insurance systems while also integrating systems at a lower level with Application Programming Interfaces (APIs).

For perfect distributed workforce, RPA insurance systems and services can do the following:

Open emails, gather data and move to core systems
Integrate with workflow automation, ruling engines for fully automated processes.
Utilize AI to enhance bot capabilities
Use data to create profitability reports
And copy and paste data among various systems and applications

As per various reports, the insurance industry is capable of automating 25% of its process by the year 2025. This brings us to the applications of RPA in the insurance industry.

RPA Use Cases for Automation in Insurance

RPA is already helping insurance businesses with automating high volume data processing tasks. What makes RPA in the insurance industry a natural fit is that it is capable of automating the end-to-end process lifecycle by integrating new front end technologies with backend environments.

Along with this, RPA use cases in the insurance industry are innumerable. Here are some of the major areas of insurance where RPA is implemented:

1. Automating insurance claim processing

Claim processing is a document sensitive, detail oriented and time consuming process. Moreover, collecting data in multiple formats from various channels and then processing claims on time takes excessive manual intervention.

With RPA automation in insurance claims, the process can be conducted 75% faster than human processing.

Claim management automation systems use NLP and OCR to extract data and input, verify fraudulent claims and claim errors. By automating insurance claim processing, multiple manual touch points are reduced and hence businesses can accelerate timely payout with a customer centric approach.

2. Underwriting processes

Insurance underwriters have to evaluate and analyze the risk involved in insuring people and assets. By using RPA in insurance underwriting, underwriters can easily:

Fill required data field in the internal system
Analyze customer’s history and asset background
Access data from internal and external sources
Trigger system at risk and fraud cases
Evaluate loss runs etc.

3. Sales and distribution

Insurance business process automation can simplify the intimidating tasks of sales and distribution such as creating sales reports, legal and credit checks, conducting compliance etc.

Sales and distribution in the insurance sector is a highly iterative activity where funnel reports and sales records are crucial to manage and update.

This process also involves getting a quotation from multiple agents where automation in insurance can help you chalk out a workflow that ensures customer satscations with timely RPA claims.

4. Regulatory compliance

To standardize the documentation and audit trails, the insurance industry has to be regulated by strict protocols. With manual controls, your insurance business can be at a high risk of regulatory breaches. Moreover, compliance can be tricky with high record volumes and maintenance.

Insurance robotic process automation can help access log files and can easily monitor compliance using internal review processes. Insurance automation can also help with:

Customer data validation and client research
Data security operations
Account closure updation and management
Compliance report generation

5. Policy administration

One of the biggest benefits of automation in the insurance industry is automatic transactional activity monitoring. Policy administration in the insurance industry involves bidding, quoting, rating, issuing, endorsing and renewing. With such multiple processes, the insurance businesses often struggle with increased customer base.

Insurance robotics process automation can automate activities such as accounting settlements, tax settlements and regulations, credit control etc. while navigating various applications. This saves you significant time in the entire policy administration process.

6. Business and process analytics

As an insurance business, you definitely want to provide the best benefits to your customers. However multiple operational and paper intensive processes can slow you down in measuring the operational efficiency and identifying areas of improvement.

With RPA insurance services, the AI bots can easily audit trails and help with process analytics which further enhances the entire business process. That’s also how RPA improves the customer response time and streamline operations.

7. Query resolution

Unlike other industries, the insurance industry receives infinite volumes of customer queries waiting to be resolved. Providing on time resolution is important for customers and that’s where automation in insurance comes to the rescue.

Robotic process automation uses a predefined set of rules and natural language processing technology to easily interpret incoming calls, emails and resolve basic queries without any manual intervention. Read this blog to learn how AI in insurance can streamline insurance operations.

Also Read- How AI features are used in banking to enhance customer support and experience

8. Usage of legacy applications

Many insurance companies rely on legacy software and applications to execute their business process. With such systems, comes the obligation of communication with other systems. When new software solutions are included, you might find it difficult to integrate with your existing legacy software systems.

Insurance robotic process automation works as a bridge connecting the otherwise incompatible legacy applications. You can also connect your ERP systems and BPM software using automation in insurance.

Besides, insurance automation also helps businesses with policy cancellation by seamlessly switching between all customer-insurer interactions and providing faster resolutions.

Insurance automation supports sustainable business growth and while aligning with your business goals and objectives. An increasing number of insurance companies have found RPA as a cost effective and effective approach to optimize daily operations and generate growth. It’s high time we accept its benefits and leverage RPA insurance services for a long profitable insurance business.

How Can Appinventiv Help You with Automation Solutions?

Appinventiv specializes in financial software development services known to accelerate digital innovation in businesses. Our financial experts are known to reinvent the way people pay, buy and invest in today’s modern era. Our full stack FinTech development solutions include :