Hit or Myth: 3 Barriers to Automation in Insurance

When businesses think of automation, many envision straight-through processes that occur quickly and without any human intervention. Others think of automation as a solution that is easy to implement and simple to maintain. Unfortunately, the reality is a bit more complicated.

When it comes to automation in the insurance industry, there are three common barriers that prevent organizations from taking advantage of this game changing technology:

  1. Lack of standardization. Every insurance agency, wholesaler, managing general agent, and carrier has its own way of operating, which can also vary by line of business within the same organization. Specialty and non-admitted lines can differ in significant ways from standard lines and may require additional tasks to process. The lack of standardized processes is a barrier to straight-through processing (STP). According to Aite-Novarica, STP occurs most frequently in personal lines underwriting, but very rarely in commercial underwriting and hardly at all in claims processes. Because there are no standardized approaches, automation of processes must be tailored to the organization and its unique workflows.
  2. Business complexity. In addition to a lack of standardization, the complexity of business operations is another challenge for automation. Historically, commercial insurance has been more complex than personal insurance, but even in seemingly simple coverage interactions, the underlying risks and exposures of each customer can be complex. This reality poses a hurdle to tools such as robotic process automation (RPA). According to IBM, over half of insurance companies utilize RPA in some processes. Digital “robots” in RPA systems are capable of executing directions but, unlike humans, are not able to make decisions. Not every business area is a good candidate for applying automation; it takes a combination of expertise in insurance operations and automation to identify the best opportunities.
  3. Ongoing maintenance. A myth held by some is that automated processes can be set once and run continuously. In fact, even the most efficient automation tools require ongoing maintenance to continue working properly. Part of the challenge is the need for process changes, which happen frequently over the course of serving insurance customers. At ReSource Pro, we work with clients that use automation in different areas of their insurance businesses and we see on average seven process changes per month for each client. Maintenance and resetting of automation tools are therefore necessary to accommodate these changes.

Achieve Automation with a Knowledgeable Partner

ReSource Pro believes the best option for optimizing automation is to keep a human in the loop. In insurance, a select number of tasks can be performed with automation alone, but there are a great many more that can be partly automated with a person involved. This approach blends the efficiency of automation with the knowledge and service skills of a trained professional. Insurance businesses should think of automation and RPA as tools, not solutions on their own. In the hands of a skilled user, these tools can make a big difference. For achieving business objectives and enhancing the customer experience, a human in the loop offers the best of both worlds—digital and personal.

To learn more about how ReSource Pro leverages automation to optimize insurance operations visit our digital page.