Robotics in Insurance

This article is intended for insurance operations and business leaders and provides a perspective on what robotics can do for their business, why they need to embrace robotics now and how robotics can be applied to completely automate some of their most voluminous transactions. Last but not the least, it also touches upon how robotics’ short payback period enables funding of legacy modernization programs.

What can Robotics do for Insurers?

In the midst of a number of jargons such as cognitive, machine learning, artificial intelligence, it is important to understand what exactly robotics or Robotic Process Automation (RPA) can do for insurers.

  • Human steps – digital worker can perform steps that a human worker performs on a desktop, it not only works faster than humans but also delivers better consistency
  • System steps – digital worker being a software can invoke system calls to exchange information in a more secure and faster way
  • Exception handling – digital worker can handle exceptions to deal with real business situations such as sending notifications about missing information, a common scenario in new business or claims management
  • Audit trail – digital worker is far better in its ability to record its actions that may be required for auditing purposes including internal or external regulator driven
  • Dashboard and reporting – digital worker far outperforms its human counterpart in reporting its work and presenting it instantly for better management control

One area where a digital worker is not as smart as its human counterpart is the ability to interpret unstructured content and this is where robotics relies on capabilities such as machine learning (ML), natural language processing (NLP) and optical/ handprint character recognition (OCR/HCR), speech recognition and others.

Why Insurers need Robotics?

Robotics is unique amongst all technologies in that it creates software robots or ‘digital workers’ as compared to systems that other technologies create. These ‘digital workers’ are of particular interest to Insurers due to the nature of their business that involves large volumes of repetitive processing across the lifecycle of an insurance contract, from application to quotes to underwriting, billing and claims and servicing. In fact, the top 20-30 insurance processes can account for up to 80-90% of customer activity and 40% of the operations costs. These processes are highly suitable for robotic process automation due to their mundane, repetitive, structured, rule-based, high volume nature and involvement of a large number of forms and the tight turnaround time requirements. Large number of forms involved in insurance processes mean that NLP and OCR/HCR can be leveraged to maximize the benefits of robotics for insurance operational efficiency and excellence.

Robotics will not only improve the operational efficiency for insurers but will also improve the life of operations staff who mostly put in long hours trying to turnaround loads of cases, especially toward the end of the month or quarter. Thanks to the power of robotics, digital workers will be able to perform most of the repetitive, rule-based tasks in a fraction of time that human workers take.

How is Cognitive Robotics meaningful for Insurers?

Some of the most voluminous transactions for insurers are in the policy administration or policy servicing area with following as a few examples that will depend on the line of business:

  • Change of particulars
  • Change in beneficiary
  • Inclusion/ change of driver or car
  • Inclusion/ change of member
  • Certificate of insurance

The good thing about these transactions is that they involve mostly structured information, mostly in forms and can be completely automated by robotics, using NLP and OCR/HCR.

These processes are some of the important touchpoints for policyholders and ability to service them 24by7 in a matter of minutes goes a long way in improving the policyholder satisfaction. On the other hand, insurers free up some of their precious resources for some of the more creative activities or complex transactions that require higher level of intelligence such as complex underwriting or claims adjudication.

How can Robotics enable legacy modernization?

One major advantage of robotics is that its implementation is much faster than most other IT projects and payback period is less than a year. This implies that a well thought-out RPA program can deliver savings from operational expenditure that can be used to fund some of the legacy modernization projects which typically have a longer payback period.

It is important to realize that legacy modernization will be still be required even if the operational tasks are automated by robotics. A key factor is the lights-on costs associated to legacy systems and the scarcity of resources required to maintain the legacy applications, leave aside the challenges of integration to frontend applications for policyholders, agents and operations staff.

Brijesh Chandra

Brijesh is Business Solutions Lead, Insurance, Healthcare and Life Sciences, Virtusa. He drives business automation solutions and delivery models leveraging the latest technologies that deliver ROI for global enterprises. He has more than 20 years of experience with life, health, and group insurance, banking and financial services products, and service providers. Prior to joining Virtusa, Brijesh was with American International Group’s (AIG) life and health insurance business.

More Posts