A Guide to Automation in Insurance: Top Use Cases and Benefits

How do you automate insurance? Read on to learn the specifics and explore how automation is revolutionizing the insurance industry, one process at a time. 
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In the insurance industry, complexities abound. Insurance firms and agencies are grappling with labyrinthine regulations, risk management, competitive pressures, or the ever-increasing demand for seamless customer experiences. 

Automation in insurance is quickly emerging as a game-changer for firms looking to get or maintain a competitive edge.

By replacing manual processes with automated ones, insurers can streamline their operations, reduce redundancies, and eliminate human errors that often lead to costly mistakes. 

How do you automate insurance? In this blog we’re going to delve into specifics and explore how automation is revolutionizing the insurance industry, one process at a time. 

How automation is changing insurance

Insurers are dealing with a complex regulatory environment, process risk, competitive pressures, and the need for seamless customer experiences. Using automation can help you accomplish all of those and at scale.

Consider this: Making a single-digit change within pricing in a legacy system can take weeks or even months to complete. It’s like trying to turn a cruise ship – slow, cumbersome, and fraught with potential pitfalls. Now imagine a speedboat that can make quick turns and adjustments on the fly. 

That’s what automation brings to the table.

Seven use cases for automation in insurance

Even as recently as a few years ago, insurers have been hamstrung by traditional systems that might date back to the 1960’s and 1970’s. These monolithic platforms were so mission critical that it became nearly impossible to make changes in the ensuing decades even as software development methods changed. 

However, with the advent of automation and process orchestration, insurers can now break down these monolithic systems into more manageable, scalable ones. Here are some key use cases that highlight how automation is changing the game in insurance.

Launching digital transformation initiatives

Legacy systems, though mission-critical, are often cited as a roadblock to innovation and growth. Leading firms, according to PwC, are capable of “identify[ing] new product categories (as opposed to just adding new features) and have the brand strength to deliver them.” By automating various processes, insurers can deconstruct these systems into more composable elements, paving the way for digital transformation. This not only enhances operational efficiency but also offers the flexibility to adapt to changing market dynamics and scale.

Streamlining claims processing

Most times a customer is dealing with their insurer it’s going to be about a claim. 

This makes claims processing one area that can greatly benefit from digital transformation efforts. With automated workflows, insurers can expedite the claims resolution process, leading to improved customer satisfaction. No more long waiting periods or tedious paperwork; just quick, efficient service that keeps customers happy and loyal.

Speeding up risk assessment for new customers

Let’s face it—as customers we’re more impatient than ever. Whenever customers are interacting with brands, they often expect immediate or near immediate responses. They won’t wait for days or even hours to get approval for insurance. Automation enables insurers to conduct risk assessments quickly and accurately, making the customer onboarding experience far smoother. 

Adopting usage-based insurance (UBI)

“Usage-based insurance programs,” writes Forbes “generally measure speeding, acceleration and harsh braking, along with mileage and the time of day you drive”. With the growing popularity of UBI, insurers need to keep up with daily adjustments in how customers utilize their insurance. Manual methods can be time-consuming and error-prone. However, automation can make this process a piece of cake, enabling insurers to adjust premiums effectively and efficiently.

Reducing manual document reviews

Insurance firms certainly don’t lack documentation. Some of the information necessary for proper risk management can be complex and time-consuming to review meaning it requires human intervention. Automation can handle bulk (yet simpler) document reviews, freeing up employees to focus on more sensitive or unique issues. Likewise, it can ensure that those high-touch tasks are escalated to the right person for intervention. This not only improves productivity but also ensures a higher degree of accuracy in document processing.

Bolstering data security

According to the 2023 DBIR by Verizon, data breaches remain a significant threat to the insurance industry. All told, their research found 1,832 incidents of which 480 included confirmed data disclosure. Automation can enhance data security by implementing robust security protocols and ensuring end-to-end protection. Moreover, it can help insurers comply with various regulatory requirements, thereby reducing the risk of non-compliance and associated penalties.

Managing policies efficiently

Policy management is another area where automation can make a big difference. From policy issuance to renewals and modifications, automation can handle various tasks efficiently, reducing manual intervention and potential errors.

How to adopt automation in insurance

With so many options, it can be tough to choose just one place to start. Let’s dig into exactly how to implement automation effectively within your firm.

Starting with a Proof-of-Concept (PoC)

If a journey of a thousand miles begins with a single step, well, for automation that step is your proof-of-concept (PoC). A PoC is a small-scale implementation designed to validate your architecture and technology stack. You’ve got to dip your toes in the water first before you’re cannonballing in the deep end.

The PoC should focus on a specific use case. For instance, Generali Switzerland focused on auditing processes and keeping detailed, searchable historical records in a user-friendly format for compliance purposes. By keeping their focus narrow, they were able to gauge the effectiveness of automation in that area and make necessary adjustments. Remember, the goal here isn’t to achieve perfection but to learn and improve.

Moving onto a lighthouse project

Once you’ve validated your PoC, it’s time to take on a more ambitious task—a lighthouse project. This project has a broader scope and a more realistic setting, serving as a beacon for future automation initiatives. Continuing the metaphor, it’s like the torch that’ll illuminate for the ships to come in the future.

The lighthouse project should aim to solve a real business problem, demonstrating the value of automation to stakeholders. For instance, you could automate the entire claims process, from submission to resolution. Not only would this result in quicker claim settlements but also free up your staff’s time to focus on more strategic tasks.

Establishing an automation Center of Excellence (CoE)

As you progress on your automation journey, you’ll need a guiding force. That’s where an Automation Center of Excellence (CoE) comes in. The CoE is a dedicated team responsible for assessing current solutions, evaluating tools, providing training, and assisting teams with their use cases. It’s like having a team of automation experts at your disposal, ready to help you navigate the complex world of automation.

The CoE should not become a bottleneck, but rather empower teams to kick off their own automation efforts quickly and efficiently. The goal is to create a culture of innovation where teams feel confident to experiment with automation and learn from their experiences.

Expanding process automation across the organization

Once you’ve tasted success with your initial projects, it’s time to expand. This could mean scaling up existing projects or launching new ones. The extent of this expansion largely depends on your organizational culture. 

Some firms might prefer to keep automation confined to specific areas, while others might want to use the same platform across the organization.

Regardless of the approach, the key is to maintain momentum. Remember the saying, “If you’re not moving forward, you’re falling behind?” That’s especially true with how quickly digitalization is moving. 

By continually expanding your automation efforts, you can stay ahead of the curve and deliver superior customer experiences

Empowering teams to drive automation

Finally, remember that automation isn’t just a technology initiative; it’s a cultural shift. To truly reap the benefits of automation, you need to understand where you’re starting from. 

Consider ranking your organization on Camunda’s Process Orchestration Maturity Model to better understand the challenges your organization is facing in meeting automation goals. By using this framework, you’ll be able to understand where your organization stands across five different drivers to rank your automation program from 0 (no process organization) to 4 (strategic, scaled adoption).

It’s only through understanding that you can empower your teams to drive toward success. 

Provide them with the necessary training and resources, encourage them to experiment, and celebrate their successes. By doing so, you can foster a culture of innovation and continuous improvement, propelling your firm towards a brighter, more automated future.

Insurance automation doesn’t have to be difficult

Rome wasn’t built in a day. Your automation program won’t be implemented that quickly within your insurance firm either. 

It requires careful planning, execution, and continuous improvement. 

But with the right approach, you can transform your operations, enhance customer satisfaction, and secure a competitive edge. So, are you ready to embark on this exciting journey? 

The time to automate is now—so what are you waiting for? Try out Camunda free for 30 days.

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