Why Life Insurers Should Be Exploring The Use Of RPA
As interest rates go, so does the growth in investment products. Add the pressures of decade-over-decade reduction of premium growth and a younger generation that has deferred or shies away from life insurance products, and the challenge of margin improvement escalates. This scenario ultimately fuels the need for cost optimization and increased operational efficiency. Many in the life industry are turning to Robotic Process Automation (RPA) to fill this need.
According to a recent Celent survey if you are a life insurer and you are not currently exploring RPA you are not seizing on the opportunity to increase operational efficiency and reduce cost or maybe you are but have taken a different approach. Approximately seventy-six percent of life insurer survey participants are already utilizing RPA and the vast majority are planning on expanding utilization.
Although we did not analyze why some of our participants do not currently use RPA, we know the life insurers that do use RPA are realizing significant gain from their investments. The pandemic has spawned the term “digital acceleration” and RPA is one of the key catalyst for it. RPA can digitalize targeted standardized processes, and through the digital automation of data, transactions can be updated in real-time across a myriad of systems, with increased throughput and accuracy, ultimately equating to a lower operating cost.
Insurers are realizing a wide array of benefits from the application of RPA. These include improved return on investment (ROI), increased data quality, faster claims processing, and enhanced customer experience, as well as the cost reductions and increased operational efficiency for which RPA is known. Throw artificial intelligence or machine learning into the equation with unstructured data, and you can extend digital data processing automation to images, emails, and so on.
Survey participants realized improvements through RPA:
As all insurers were forced into a virtual world in 2020, they are now looking for ways to apply RPA along with cognitive solutions to minimize dependencies on the physical workforce where it makes the most sense. This is also meant to mitigate risk against similar global catastrophes in the future.
Significant global market growth in RPA is projected for the foreseeable future. RPA applications are pervasive across all industries and its application in the insurance industry is forecasted to continue to grow at a rapid pace over the next several years. P&C insurers are also addressing several areas in the data processing ecosystem with RPA, including underwriting and claims.
In today’s ultra-competitive environment, it is critical for life insurers to digitize and automate as many of its business processes as possible to improve operating cost and customer experience. Key process areas of focus for automation are many, but some of the most significant process gains are in the areas of policy administration, underwriting, claims, and customer servicing.
If you would like to learn more, you can see the full report by following this link:
If you are a P&C insurer you can see the full P&C report by following this link: