Blog | Nov 16, 2021

Reinventing Insurance Business Models with Intelligent Automation

Reinventing Insurance Business Models with Intelligent Automation

We know that intelligent automation can be a strong basis for transformation within the insurance sector. However, understanding what that really means in changing the DNA of an insurance business can be difficult in the beginning.

The insurance leaders I speak to are operating with a complex mix of challenges impacting operational costs, legacy systems, available data pools, and the tendency to operate in silos. At the same time, they realise the need to contend with a growing customer appetite for flexible products, hyper-personalization, and digital first experiences. CX is a crucial success criteria and strategic priority for supporting retention and trust.

The ongoing pandemic continues to impact changes in global and regional demand, making it challenging to maintain acceptable loss ratios while managing fraud and meeting new guidelines and regulations.

In a recent roundtable hosted by Blue Prism, I was fortunate to speak with a number of C-suite executives from the insurance sector in Singapore, Hong Kong and Sydney to discuss the opportunities and challenges in using automation to transform and solve these challenges. Below are some of the key insights from this session.

What are some of the blockers that you see inhibiting progress with your automation program?

“It‘s partly the maturity of the organization to be able to accept a certain level of change. When you look at APAC specifically, a lot of locations are working with very low-cost resources. Hence when we look at the reduction of human operating expenses, we are not necessarily solving the business problem that we are facing. And if the guys at the top say, well our numbers are also coming down, RPA does not get the focus it needs.”

How do you manage the different levels of automation maturity to ensure that teams learn from each other?

“We have a very complex organizational structure with 18 different markets across APAC and many different teams. There are really big departments such as finance and HR, so it’s quite difficult to have the required flow of information and best practices across the different functions and entities. Now we are trying to create shared best practices and models across all the entities so they have a clear set of documentation that can be shared anywhere within the company.”

What does the automation landscape look like in your team now compared with 12 months ago?

“We’ve put a considerable effort into identifying the areas, use cases and processes where we can really make use of automation. We are not just looking to automate the process to put a tick in the KPI box. We want to achieve the real benefits of a better customer experience, so it’s important to look at the automation program from an operational excellence and efficiency point of view.

“With all the processes we have in our auto underwriting, customer segmentation, risk modelling and claims, there is huge scope and potential for automation. In the beginning, we started with unattended RPA on the desktop, and that was amazing, but now we are trying to move the needle by working with machine learning, process mining and proving the value of those kinds of technologies.”

Is RPA the TiVo of television, but ultimately there's a Netflix which is a solution that would achieve the same outcome?

“We are seeing financial services organizations doing this already with intelligent automation, where they will build a solution as a native digital process by creating a hybrid workforce – a combination of human, robotics and technology. This is where the ROM (Robotic Operating Model) is so important – it offers a blueprint as to how to bring together all the key elements such as people, culture, technology, governance and leadership to use them to innovate.

“I also think that automation needs to go beyond IT people. But with the advent of local development and no-code solutions, there should be an opportunity for involving IT savvy people from other areas of the organisation who have a different perspective, rather than one department taking on all of the problems.”

Illustrating Blue Prism’s ROM in action

During the roundtable, I had the opportunity to discuss Blue Prism’s Robotic Operating Model (ROM), and the opportunities it presents for insurers. I’ve found from my clients, that as soon as they get to that point where the low hanging fruit has been picked and everybody has got over the jubilation of that, some of the governance and management – whether technical or risk-led – starts happening because there is this explosion of excited citizen developers.

Although these citizen developers have the greatest of intentions, they can cause issues for the organization. This is exactly what the ROM addresses. Ideally, organizations would use it from the start of an automation implementation project, and it’s possible to use it to overcome some of the challenges faced down the line.

We work with a large bank in Sydney, which deployed over 200 digital workers. They were encountering organizational scale challenges, but by using the ROM they were able to customize the way they were using intelligent automation while creating new best practices. Recently, the automation team was even taken out of the IT function and elevated to a cross-business operational unit - not only because of the technology’s success but because of the organization’s vision to deploy a digital workforce alongside their human teams.

Collaboration is the secret to automating every part of the value chain

We believe there is tremendous potential for automation in every part of the insurance sector. With a clear automation strategy informed by an effective ROM, insurers can unlock a competitive advantage by finding new areas of their business to be automated.

Insurers can now deploy a digital worker at every touchpoint with a customer, but the key is creating a collaborative workforce between the human and the digital. Humans then become free to do the value-adding work and focus on the CX, while digital workers handle the administration and coordinate with the other technologies such as AI and Machine Learning to provide all the necessary data and insights.

True transformation begins by first breaking away from inflexible monolithic structures, allowing insurers to create a more agile and resilient organization. By connecting multiple, fragmented systems and data, insurers can bring a truly omnichannel approach to customer experience and product development – which are the new drivers of competitive advantage in this industry.