Robotic process automation (RPA) is a key priority for the vast majority of insurers – according to IDC’s EMEA, European Industry Acceleration Survey of April 2021. With 94% of insurers either using or exploring the automation of their processes and operations. Indeed, the most recent generations of technologies such as Natural Language Processing (NLP), Bots or Emotion Recognition linked to RPA allow insurers to significantly optimize their internal resources while delivering faster and better services to their customers.
It is also true to say that the last decade has seen very few examples of truly innovative products and services in the industry. Blue Oceans have proven difficult to discover and insurers keep relying on mergers and acquisitions to compensate for their lack of performance in generating organic growth.
In these times of economic turmoil and with global inflation growing rapidly, companies are “naturally” reverting to proven solutions that guarantee they reach their profit targets, i.e., further reduction of their expense ratio.
Acting on the expenses is the straightforward way to reach the bottom-line targets
Obviously scraping a few points off the commissions paid to their agents and brokers is out of scope for all insurers as they struggle to maintain their top line. And, even if they become more digital day after day, customers still rely heavily on the expertise of the traditional sales channels to find their way through the maze of the companies, products, services, exclusions, and tariffs.
This leaves internal expenses as the only accessible route to cost reduction. And these are made of mainly two parts: staff and IT costs.
As the industry is still very busy with its own digitalization, IT budgets are not expected to decline any time soon. The future of all players relies on these investments, to further reduce the operational weight generated by their numerous legacy systems.
IT is out of scope in any cost-cutting exercises
Which leaves, on the front line, those functions that still consume a lot of human resources, i.e., underwriting, policy servicing and claims handling.
Now, these three functions are quite tricky to optimize. They all are at the core of the relationship with the customer and reducing their resources almost immediately has a negative impact on the Net Promoter Score (NPS). Which is why, traditionally, there is some reluctance to focusing cost cutting measures in these key areas
But RPA, NLP, Bots, and other AI-powered technologies are now reaching their maturity and are increasingly being used in some of the most critical customer journeys, delivering higher efficiency and effectiveness in providing the quality services expected by the customers.
Empowering Employees with AI-based technologies
And not only is this increasing the overall satisfaction of customers, but also the dynamism and satisfaction of the knowledge-workers inside the organizations as they are discharged from many repetitive and low value-add tasks.
Automation in such conditions is not perceived anymore by employees as a threat, but as an opportunity that finally allows them to dedicate 100% of their time to taking care of their customers.
AI-enabled data ingestion, sorting, storage, and pre-analysis should thus be used to augment the capacities of the ‘knowledge worker’ in both underwriting and claims management, enabling those specialists to concentrate their unique expertise on a more efficient, faster and customer-friendly experience.