The insurance industry is not only bedeviled by familiar growth and profitability issues but also a very different and demanding consumer than in the past. Today’s customer wants transparent prices, transparent (via social networks) service experiences and little – if any - use of agent relationships. The industry is also discovering how robotic process automation (RPA) can be a very good partner in driving innovative and cost-effective solutions to these challenges.
This simple scenario illustrates how insurance has changed and the role RPA can play in meeting those changes. A potential customer uses a mobile device to request an online automobile policy quote from a well- known company. After reviewing the quote against other online options, the consumer accepts the quote via the mobile device and purchases the underwritten policy. .
This scenario calls for the company to generate an automobile policy quote, then underwrite and issue the policy. It may look easy from the consumer’s perspective, but seamlessly performing those activities would be a struggle for most insurance companies.
Companies would struggle because much of their data is locked into legacy systems and not integrated in either a seamless or flexible way. The first step in this scenario – the quote – sidesteps that issue because quotes are generated with only a limited range of data. The second step – underwriting and fulfillment – triggers all the ramifications from that issue because an underwriting policy administration system requires significant data from a wide variety of systems and sources.
Scenario challenges also differ depending upon whether the consumer and competitors are new. If the consumer and competitors are new, the well-known insurance company will face both operational and competitive challenges. Since new competitors have no legacy systems, they won’t incur effort for new product & policy admin integration or integrating the new customer into their legacy systems. If the competitors are not new, both they and the scenario company will have common integration issues, and competitive disadvantages will come down to how well they are managed. The historical approach to these issues has been large projects for enterprise-wide data integration and management. The end state of these projects is tightly integrated systems, business users with a single customer view and an active sunset program for the legacy systems.
RPA Scenario Benefits
Robotic process automation brings several benefits to this scenario.
- Robotic software links systems can quickly provide system and data linkage by wrapping a company's legacy systems. This avoids serious business risks and the large investments of time and money in tight, expensive system integration and complex data warehouse projects.
- Software robotics interacts well with digital channels. In the case of this scenario, once the customer makes the purchase decision, the configured automation software processes the policy through the policy admin system, sets up billing in the finance system and issues policy documents through the preferred digital channel.
RPA Industry-Wide Benefits
- Incremental Data and Systems Migration: By inexpensively wrapping legacy systems and gaining substantial integration benefits without the integration, a company may have the option of a measured pace of data and system migration. For example, customer policy migration on renewal dates rather than one “big bang”.
- Increased ability to successfully compete new competitors with streamlined distribution and operational models – and no legacy system & data issues.
- Higher levels of service offering innovation; funded by lower operational costs and smaller data/system integration investments.
- Time-to-Market: incurring expenses far below that of prior technologies, robotic software can be rapidly deployed, allowing products customized for geographies or market niches to be marketed without the delay and expense associated with legacy platforms.
David Eddy has fifteen years of global application services experience.