RPA and the Insurance Industry


Many insurance companies — whether


providers of health insurance, car insurance, property insurance, or travel insurance — are heavily inundated with back-office processes. Insurers regularly handle claims-processing and underwriting as well as providing policy quotes. This means they are often overwhelmed with high volumes of repetitive business practices that prevent them from delivering timely customer service, meeting growth and profit expectations, and maintaining a competitive advantage in the insurance market.

As a result, many insurance companies worldwide are turning to automation technologies to help them streamline their business processes and increase their ability to take on more clients. While some of these companies already make use of partial automation — in order to scan paper documents or to speed up data entry, for example — greater automation capabilities are offered by robotic process automation (RPA). RPA can provide added support to help insurance companies automate entire workflows and streamline a greater number of their operational activities.

Rod Dunlap, the director of RPA practice at the IT consulting company Alsbridge, suggests that “Robotics process automation is the next evolution in software development and lends itself very nicely” to alleviating the back office strains that impact most insurance companies.

In order to get a better picture of the beneficial impacts that RPA is able to deliver to insurers, we’ll first examine the challenges faced by insurance providers. Then, we’ll then consider how RPA can be implemented to address some of these pain points.

Challenges for the insurance industry

Companies around the world, regardless of size or industry, are constrained by business challenges. However, these obstacles are often greater for businesses, like insurance providers, that are heavily reliant on back-office processes. Some of the biggest operational challenges faced by insurance companies include:

Manual input from various data sources: Insurance companies regularly deal with mixed data formats, including a variety of paper files and electronic documents. This means that, in order to process an insurance claim or provide a quote to a client, employees must manually enter information from the various data sources into the company database. This process is time-consuming and costly. Even more so, this manual labor is highly prone to errors and inconsistency, which could lead to significant discrepancies in company records.

Legacy applications and disparate systems: Many insurers still rely on legacy systems or multiple different systems, applications, and softwares to manage their business functions. When implementing new software solutions,  such as ERP (enterprise resource planning) or BPM (business process management), many companies face challenges in integrating these with their existing IT setup. As a result, the integration of new softwares can involve the partial or entire replacement of the existing setup in addition to requiring a significant investment of time, money, and employee effort. Because of these challenges, many companies are left with old systems that no longer provide the support needed for company growth and development.

Maintaining regulation and compliance: All companies, but especially insurers, are required to comply with a host of compliance standards, including, for example, tax laws, PCI standards, and HIPAA privacy rules. Updates or improvements to these regulations are common, and this often means that business processes suffer or need to be re-established in order to reflect these changes. While such laws are meant to protect business operations, company employees, and clients, compliance difficulties and non-compliance by insurance companies can result in a range of damaging financial and operational consequences.

How RPA can help

Despite these challenges, Accenture has shown that, when implemented successfully, RPA can help reduce some of the business obstacles faced by insurance companies. RPA “can free up between 20 and 30 percent of capacity at an enterprise level whilst also minimising operational risk and improving the customer experience.”

Now that we’ve discussed some of the major challenges insurance companies in streamlining their back-office processes, we can discuss how RPA can overcome these obstacles by:

Streamlining claims processing: Successful claims processing is fundamental to the profitability of insurance providers. Typically, claims processing is error-prone and time-consuming, requiring significant investment by company employees. Replacing the need to process insurance claims manually, RPA is able to reduce the amount of time that is spent on these repetitive processes and reduce, if not eliminate, human errors. This means that insurance claims can be processed in a much more efficient, accurate, expedient manner.

Scaling with ease: Because the number of active RPA software robots can be increased or decreased in a matter of seconds, scalability is easy to achieve with RPA. Software robots can be scaled up or down during certain times of the day or year, when there are a large number of claims or quotes to be processed. While such temporary scaling of RPA software robots is essential in the short term, the number of active robots can also be increased permanently in order to meet long-term growth demands.

Non-invasive compatibility: Many insurance providers still rely on legacy systems or disparate programs, so the non-invasive nature of RPA allows the technology to be an ideal solution for companies wanting to easily streamline their business processes. RPA imitates human keystrokes and mouse clicks, interacting with the presentation layer of computer programs and applications. As a result, RPA can be implemented in addition to existing programs, without the need for insurance providers to replace their existing IT setup. RPA can also be implemented with limited support of an insurer’s IT team because it does not require users to have programming knowledge.

Improved regulatory compliance: Compliance is an important component of the success of insurance companies. RPA ensures the accuracy of data and its software robots maintain a running log of their actions. As a result, compliance with regulations can be monitored on an ongoing basis through internal reviews. This allows insurance companies to keep an eye on compliance themselves, in addition to being better prepared in case of an external audit.

RPA in the long-term

Especially within industries, like insurance, which are highly dependent on the efficiency of their back office, RPA is being adopted at increasing rates in order to used to automate burdensome, high volume, and time-consuming business activities. This automation technology is being used to fight some of the biggest challenges faced by insurance providers, in order to promote long-term success opportunities and a competitive marketplace.

RPA can help insurers achieve increased profits, permanent company growth, better compliance, and improved customer service, all at a lower cost than ever possible before. Because of the flexibility and improvements that RPA can deliver, its adoption by insurance companies is only expected to become more global and inevitable. Rather than remaining just a technology option to choose from, RPA will eventually become a necessary component for insurance providers to remain competitive industry leaders.

Nick Ostdick headshot
Nick Ostdick

Content Developer, Trekk

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