RPA in insurance: 10 use cases and adoption guidelines
January 19, 2023
Intelligent automation technologies and RPA services delegate a growing number of tasks to machines and allow human professionals to focus on more motivating and high-value duties, such as business analytics, data-driven decision-making, and customer care.
Let’s find out where RPA is applied in the insurance industry, which benefits come from its adoption, and how to streamline its implementation.
Table of contents
RPA in the insurance market stats
Scheme title: Deployment rates of modern technologies among more than 100 insurer CIO members of the Novarica Insurance Technology Research Council
Data source: novarica.com—Insurers Actively Adopting Emerging Technology with Clear Value like RPA and Chatbots, 2020
the global RPA market share of the BFSI sector, which makes it the leading segment.
Robotic Process Automation Market Report Grand View Research, 2022
the share of insurance companies that have already implemented RPA in their business processes.
Emerging Technology in Insurance Novarica, 2020
10 RPA use cases in insurance
The range of RPA use cases is growing relentlessly in virtually every sector, and the insurance industry is no exception to this positive trend. Let's take a look at some of the most interesting ways to leverage RPA for insurance automation.
Underwriting
Policy administration and servicing
Accounting
Customer service
Policy cancellation
BI and analytics
Fraud detection
Fraudulent claims account for around 10% of property-casualty insurance losses, according to the Coalition Against Insurance Fraud. Combined with AI and machine learning fraud detection algorithms, RPA bots can autonomously isolate suspicious claims reporting inconsistent data, triage them into a special queue for further analysis, and trigger an investigation request.
Human resources
Marketing
Real-life examples of RPA in insurance
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Benefits of RPA in insurance
The adoption of RPA in insurance can positively impact every function of your business and help you achieve a competitive edge in the market.
Improved efficiency
Savings
Superior accuracy
Enhanced regulatory compliance
Easy integration
Better scalability
Improved customer experience
Best RPA platforms for insurance
RPA platforms provide insurance companies with a full spectrum of native functionalities, including low-code/no-code GUIs and monitoring tools, to easily configure their own bots and harmonize their workflows. Here are the current RPA platform market leaders, according to Gartner's 2021 Magic Quadrant for Robotic Process Automation.
Pros
- Low-code UX app builder
- Top scalability, customization, and ease of deployment
- Solid integration capabilities
Cons
- Financially demanding for small automatization projects
- Complex pricing policy and service/product offering
Target companies
- SMEs
- Large enterprises
Pricing
- Two packages (Pro and Enterprise)
- Price on request
Pros
- Artificial intelligence-powered cognitive automation
- Solid data analytics capabilities
- Strong focus on cloud technologies
Cons
- Inaccurate data extraction from images
- Challenging upgrade from AA’s legacy platform to Automation 360
Target companies
- Medium businesses
- Large businesses
Pricing
Pros
- Built-in API connectors
- Integration with Microsoft’s software ecosystem
- Low-code development support
Cons
- Windows-centric
- Complex navigation between Desktop and cloud-based Power Automate
Target companies
- SMEs
- Large enterprises
Pricing
- Per user plan ($15 per user/month)
- Per user plan with attended RPA ($40 per user/month)
- Per flow plan (Starting at $500 per month)
Pros
- Extensive partner and customer ecosystem
- Wide range of industry-specific functionalities
- Solid security features
Cons
- Low-code app development and API integration can be improved
- Limited responsiveness to customer inquiries
Target companies
- Medium businesses
- Large businesses
Pricing
- Price on request
- A choice between flat and consumption-based pricing models
Implementation guidelines for RPA in insurance
To catalyze the structural shift towards process automation, insurance companies will need to take into account a handful of key factors, including:
Upskill your staff
New technologies require new skills for proper implementation and functioning. That's why insurance companies should focus on recruiting and retaining qualified IT professionals with proven experience in RPA and related technologies, such as machine learning and natural language processing, or partner with other organizations boasting this expertise. Furthermore, with RPA bots taking over tedious clerical tasks, insurance companies should help their employees develop strategic, analytical and social skills, which cannot be replicated by robots.
Identify a suitable use case
Where are robots worth deploying? Generally speaking, RPA is best suited for automating repetitive tasks and high-volume intensive processes affected by a high human error rate. Indeed, according to PwC's 2019 Actuarial RPA survey, RPA's most popular use cases in insurance involve data processing and reporting tasks. These include sending outputs (usually emails), running ETL processes, creating audit trails, compiling reports for stakeholders, and acquiring data from Oracle, SAP, or other enterprise systems.
Other important and fairly widespread use cases relate to activities that are not exclusive to the insurance sector but common among all industries, namely finance and accounting processes such as reconciliations, GAAP reporting, and so on.
Scheme title: RPA adoption rate in insurance business processes
Data source: pwc.com—PwC’s 2019 actuarial robotic process automation (RPA) survey report
Finance/accounting processes
Data and reporting processes
Define an adoption framework
Defining a suitable framework will help you streamline RPA implementation. This should encompass several factors, including:
- Implementation roadmap detailing key project phases and their timeframe.
- IT system reconfiguration in light of your software ecosystem, corporate workflows, and automation goals.
- Cost/benefit assessment and accurate budgeting to define the required investment and avoid cost overruns.
- Post-deployment evaluation based on relevant metrics to measure the success of your RPA solution.
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Challenges of RPA in insurance
Issue
Solution
Limitations of traditional RPAs
Issue
Solution
The majority of insurance workflows follow a pure "if/then" logic, making RPA particularly useful even in its most basic configurations. Old-gen bots, in fact, follow a strictly rule-based approach and can handle structured data like numbers quite well. On the other hand, they may have a hard time facing exceptions and extracting unstructured data from sources like images and videos.
Process fragmentation
Issue
Solution
Automating non-synergistic processes might make them faster, but not necessarily more efficient. So much so that, according to Deloitte's 2022 Automation with intelligence report, immature and fragmented processes represent one of the top barriers to effective automation. Rather, automating single processes without harmonizing the entire corporate workflow might result in new bottlenecks.
Resistance to change
Issue
Solution
An obsolete corporate culture and the consequent resistance to change can seriously hinder RPA adoption. The three main embodiments of this rather common challenge are employees afraid of job disruptions caused by mass automation, top managers not yet ready to delegate crucial tasks to robots, and stakeholders reluctant to invest in automation.
An opportunity for RPA pioneers
Despite the proven benefits of RPA in insurance and its widespread adoption in the BFSI macro-group as a whole, Deloitte highlighted the fact that the insurance industry has been lagging behind the financial and banking sectors in terms of RPA implementation maturity. Whether it’s the effect of a particularly conservative mindset or a matter of process fragmentation, this low propensity for change may represent both a weak point for this industry and an opportunity for far-sighted companies willing to embark on a challenging but rewarding automation journey. To walk this path safely and turn your insurance company into an automated enterprise, rely on Itransition's team of experienced RPA developers and consultants.
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