Insurance automation: How to accelerate processes with technology  

The history of technological progress boils down to the slight decrease in manual labor and the gradual growth of machine involvement in workshop processes. The robust advent of Industry 4.0 has given a high-tech boost to this automation drive, with AI and ML solutions carrying the day in various industries. However, the insurance sector lags in this across-the-board digitalization crusade, with automation initiatives having a broad application field still unconquered. 

Insurance automation  

What did the shop floor routine in the insurance industry look like a decade ago? It was a paper-reliant realm where employees had to sift tons of paper-format data to arrive at results and oblige the clientele. In our IT-driven age, such an old-school approach spells inadequacy in tackling pipeline activities and ultimately losing in the cut-throat competition in the insurance sector today. In a 2020 survey, over 40% of customers announced they were ready to jump ship for another service provider if their current one doesn’t leverage digital channels in their insurance workflow.   

The second reason behind the IT-powered transformation of the insurance domain is the aftermath of the global pandemic. As a result, people have begun to prioritize contactless and remote forms of interaction, which opened broad vistas for ushering automation into the industry on a large scale. 

Insurance automation means a set of software tools (aka insurtech solutions) employed by organizations in this field to streamline operations related to marketing, sales, renewals, and other core activities. Unfortunately, data and procedural complexities, pervasive third-party involvement, and a nuance-ridden character of request handling symptomatic of the domain are the significant factors currently hamstringing the agile onboarding of insurance automation solutions. Yet, harnessing state-of-the-art technologies can bring a lot of assets to the stakeholders in this sphere.  

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Eight benefits of insurance automation

Insurance organizations partnered with DICEUS in multiple insurtech projects report numerous boons that automation has yielded both for insurers and their clients.

Benefit 1 — Cost reduction  

Insurance companies process enormous amounts of data. If the human personnel is assigned to cope with this ordeal, the organization will have to pay through the nose for the qualified work of the numerous high-profile specialists. However, by implementing automation, they cut down on expenditures and thus increase their profits. Eventually, it will benefit not only insurers, but consumers as well since the prices for insurance services will become more affordable.  

Benefit 2 — Surge in efficiency 

Insurtech solutions save not only money but also the time of both service providers and consumers. Tech-savvy companies will be able to speed up all IT-driven pipeline procedures and enhance the productivity of their work immensely. Clients can spend less time on red tape and get the desired outcome quickly. 

Benefit 3 — Human error mitigation 

Finances are at the core of insurance operations, and mistakes cost organizations or policyholders money — and vast sums of money, too. They can also cause many headaches if lawsuits filed by disgruntled clients are involved. Insurance automation can augment accuracy and keep errors to a minimum by excluding the human factor from the lion’s share of repetitive or redundant workflow operations and letting AI handle them.

Benefit 4 — Competitive edge 

An insurance firm’s swift, seamless, and error-free functioning will let it stand out among rivals in the niche and attract customers driven by its high quality of services.  

Benefit 5 — Sales growth 

All the boons mentioned above translate into a superb brand business reputation, bolsters lead conversion and triggers a steady influx of new customers. Besides, top-notch insurance automation solutions deliver valuable insights and enable companies to improve their decision-making and administer more knowledgeable marketing campaigns, considerably augmenting the customer base and driving sales.  

Benefit 6 — Accurate predictions 

With all historical data at their fingertips and an automated analytical prediction tool, insurers can evaluate potential risks, minimize potential losses, and take the oncoming trends in the niche in their stride. 

Benefit 7 — Fraud detection 

Like any other finance-related industry, the insurance realm is extremely attractive for fraud. As a result, the insurtech solution market focused on fraud prevention grows apace and is predicted to reach $10 billion in 2025, providing precise risk scoring, computer vision-powered claims processing, and other AI-fueled mechanisms called to outsmart perpetrators and protect companies in the insurance field as well as their clientele.

Benefit 8 — Improved customer experience 

Ultimately, this is what any business aims at. The easier and faster customers reach their goals and get the required high-quality service with a moderate price tag, the greater their satisfaction. Automation tools are an excellent instrument for revving customer engagement and, simultaneously, making insurance products flexible in meeting every client’s needs halfway through offering personalized services.

With multiple perks, implement automation into various insurance pipeline sectors and procedures. 

Insurance automation use cases

There are several mission-critical areas where insurance automation brings the most value. 

Claim processing 

This is an exceedingly time-consuming, detail-focused, and document-sensitive routine. Moreover, its reliance on data in various formats collected from multiple sources traditionally required a significant amount of manual intervention. However, by implementing an automation system that utilizes natural language processing and optical character recognition, insurers can quickly obtain accurate input data, identify fraudulent claims, and rule out errors, thus accelerating payout and keeping customers satisfied. After all, the efficient handling of claim processing is the tipping factor for 87% of people to opt for an insurance vendor.  

Consider insurance claims management software development to automate and digitize your claims processing processes.

Underwriting 

The chief task of underwriters is to evaluate the risks involved in insuring people’s life and property. Automation software can be employed at all stages of this process, streamlining and facilitating: 

• The collection of data from external and internal sources 
• The analysis of the client’s history and asset background 
• Data entering into the internal environment 
• The assessment of loss 
• Triggering fraud and system-at-risk cases 

Regulatory compliance 

Strict protocols and ordinances govern the insurance industry. The legislation in the sphere is often amended and amplified, so keeping track of these changes is quite challenging for insurance companies. Automation solutions will help you avoid regulatory breaches by: 

• Employing internal review mechanisms to access log files and monitor compliance in real-time 
• Generating compliance reports 
• Performing client data validation and customer research 
• Conducting data security control 
• Standardizing documentation and audit trails 
• Managing and updating account closures 

Billing and payments 

This component is crucial for ensuring consistent payments and supporting loyal customers. To achieve these objectives, automation software can: 

• Leverage auto-reconciliation to change billing (say, from an annual payment to a monthly plan) at will 
• Provide online payment intake with Automated Clearing House (ACH) or credit card 
• Extend due payment dates on demand 
• Employ user-configurable reports and settings to monitor trends and adjust to changes in the niche 

Customer service 

Modern automation tools can take the interaction of insurance organizations with clients to a new level. For instance, by launching a chatbot, they can promote customer onboarding, notify clients about the latest developments, provide round-the-clock support and consultations, collect client feedback, and speed up query handling. If you build an insurance app, your brand will acquire one more communication channel with the clientele and cater to the requirements and preferences of the vast number of smartphone users. 

Alongside these mainstream use cases, automation in insurance is characterized by a number of novelties that are quickly gaining traction nowadays and will shape the contours of the niche in the foreseeable future.  

Current insurance automation trends

Seasoned experts of DICEUS constantly keep their fingers on the insurance industry’s pulse, so they are well aware of the latest innovations and oncoming trends in the field. 

RPA and BPA 

A fair share of insurance processes contain rule-based or repetitive tasks. Charging human personnel to handle them is a waste of qualified labor. Robotic process automation solutions can tackle simple jobs and free employees to pursue more complex or creative assignments. However, more sophisticated errands involving multiple stakeholders and systems are above RPA’s scope. This is where business process automation software steps in.

Scalable and flexible RPA tools complement end-to-end business process optimization and adopt a holistic approach to automating insurance workflows. This reduces manual effort, minimizes errors, and dramatically boosts productivity. Another perk of BPA systems is their analytics and reporting module, which can help employees obtain valuable insights into problem areas and outline prospects for further improvements.

Artificial intelligence 

AI-powered products take intelligent automation in the insurance realm to a new level. Machine learning, large language models, natural language processing, generative AI, computer vision, and other technologies are making a robust advent into numerous insurance workflows. By automating them on a large scale (known as hyperautomation), AI-driven software streamlines and facilitates document handling, data processing, fraud detection, underwriting, claims processing, and other pipeline operations in the sector. Thanks to AI-driven tools, insurance agencies can analyze vast amounts of customer data very swiftly and tailor their product offers to the needs and preferences of individual clients.  

Low-code and no-code systems 

Parallel to involving state-of-the-art technologies, the insurance sector is dynamically embracing the democratization of the IT domain, enabling non-tech users to participate in high-tech initiatives. Low-code and no-code tools and platforms become game-changers for insurance agents, who can develop and implement their professional products with minimal effort, relying only on the average digital competence. This is an especially attractive opportunity to reach business success and go big-time for small insurance organizations that can’t afford to hire professional IT expertise.  

Chatbots and virtual assistants 

Ultimate customer satisfaction is the name of the game in the insurance field. One of the paths leading to a client’s heart is superb customer support 24/7. And this is what chatbots and virtual assistants excel at. When fueled by machine learning algorithms and natural language processing systems, such tools can maintain humanlike conversations with clients, respond to their queries, and solve problems, learning from past interactions.  

Cybersecurity and compliance automation 

The insurance realm is one of the most heavily regulated, where agencies must comply with numerous norms and standards concerning customer data security and privacy. The human workforce can’t cope with keeping track of the ever-growing and constantly changing body of such laws, which is a cakewalk for automation software. Special compliance tools ceaselessly monitor the security perimeter of the organization’s IT ecosystem, compare its protective measures against the existing industry norms, and alert compliance officers if they spot some discrepancies.  

Besides, cutting-edge cybersecurity solutions are good at detecting potential threats, identifying compromises and intrusions, and automatically initiating security protocols that ensure the inviolability and integrity of sensitive personal and business data the company employs in its shop floor processes.  

Centers of excellence 

Harnessing automation across the organization’s digital resources is a tall order for its employees, given the complex standardization, customization, and scaling measures they must implement. Many insurance agencies, including IT experts, insurance managers, team leaders, and automation consultants, establish Centers of Excellence to promote and coordinate these efforts. Such a versatile team of specialists takes a holistic view of embracing automation, aligns IT initiatives in the field with business goals the company pursues, and ensures the full-cycle implementation of automation projects.  

To automate insurance operations efficiently, you should consider the latest trends in the insurance automation sector and take the right approach to integrating proper solutions into your company’s workflow. 

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How to automate insurance operations

As a seasoned IT vendor with long-time experience developing top-notch insurance automation tools, DICEUS knows that implementing insurance automation is a no-nonsense job for any organization in the sector. What is the best way to tackle it?

 

Step 1. Discover where you stand 

Start with evaluating the current condition of your company to pinpoint areas and processes that can be automated.  

Step 2. Prioritize goals 

First, identify several aspects susceptible to automation. Which should you begin with? The rule of thumb is to first aim for the processes that bring your organization the most value. Next must come the areas where you underperform and which need improvement badly. 

Step 3. Come to grips with expenses 

Any high-tech transformation isn’t a chump change issue, so you must invest first to reap benefits later. First, ensure that the scale of automation you envisage matches your budget for each process you will automate. Typically, more elementary and repetitive tasks are cheaper to automate, so it makes sense to kick off with them. 

Step 4. Draw a roadmap 

Now that you know in what direction you would channel your efforts, you should diagram the process to be automated. In this way, you will obtain a clear-cut automation flow to implement. 

Step 5. Standardize before you automate 

Automation proceeds quicker if the tasks you are going to upgrade follow a boilerplate procedure. Otherwise, you will be distracted by lots of minute details you must bring into accordance on the hoof instead of smoothly moving from stage to stage along the pre-determined route.  

Step 6. Train employees 

It is not only about teaching personnel how to use a dashboard or find their way about an app. It goes without saying. You should realize that any large-scale transformation will fail if its participants don’t see the necessity of the change or – worst of all – resist it. That is why you should focus on fostering a work culture that would keep the staff open-minded and open to innovations.  

Step 7. Implement the solution(s) 

After all the preparatory stages are over, you can embrace automation hammer and tongs. Start small. For instance, AI can be utilized to predict entries in standard forms or RPA can be employed to pull data from spreadsheets and emails. When you are a confident user of these low-level automated procedures, move on to more sophisticated assignments like predicting risk profiles or introducing dynamic pricing and situation-tailored policies. And remember to monitor the performance regularly and fine-tune the instruments to maximize efficiency. 

The success of your insurance automation campaign crucially depends on the software you harness for it. Of course, plenty of boxed tools (Microsoft Azure Form Recognizer, Intelligent Document Processing by Automation Anywhere, Document Understanding by UiPath, etc.). However, while choosing the one, you should ensure they are foolproof in usage, play well with your environment and legacy systems, and have cloud-based accessibility.  

Yet, off-the-shelf software has an average roster of features that may be inadequate for your company’s needs. A wiser approach is to opt for a custom insurance automation solution.

DICEUS, as an expert in creating insurtech software, can develop a tool that will dovetail into your organization’s business goals and requirements and will be flexible to upscale when the growth of your brand demands it. 

Drawing a bottom line

In the age of ubiquitous digitalization, insurance companies with big-time aspirations have no choice but to harness professional software. Bespoke insurance automation tools will enable them to curtail expenditures, eliminate errors, forestall fraud, step up all workflow procedures (from claims processing and underwriting to billing and payments), enhance efficiency, and augment customer service, thus gaining a decisive edge over their competitors in the niche. 

To get the most out of insurtech automation tools, you should follow the best practices in the niche, monitor the latest trends in the sector, and hire vetted IT outsources to create custom automation software that aligns with your organization’s business and technical requirements.

Frequently asked questions