Why Life Insurance is ahead of Property and Casualty (P&C) on Automation
PwC’s 2019 Actuarial RPA Survey Report explores the application of automation in insurance – or, more specifically, RPA’s use in actuarial function within Property & Casualty and Life Insurance companies.
Here’s some of its key takeaways, and our thoughts about them.
PwC Takeaway: The insurance industry lags in the adoption of automation.
Kryon Adds: Actually, tech-laggards are the best candidates for RPA adoption.
According to PwC, the insurance industry is sluggish in adopting automation, moving slower than its financial services counterparts. The report concludes that actuarial departments are at an early stage of RPA exploration; while enterprise CoEs are popping up somewhere in many insurance carriers, a full 90% of actuarial departments report they have not made meaningful progress toward implementation.
But – and here’s the interesting bit – while it’s true that the insurance industry tends to move slowly when it comes to technology, RPA is different. That’s because industries that are technologically backward are the best candidates for RPA.
RPA is not typical technology, in the sense that it helps those who are drowning in outdated processes more than anyone else. Logically, therefore, insurance should be leading other financial sectors in RPA adoption – with process automation bots handling legacy systems that have heavy data entry requirements and difficult integration paths.
Insurance is burdened with old tech, thanks to a combination of regulatory compliance and lack of innovation, so RPA is particularly applicable. Companies can improve efficiency using bots to enter repetitive data into disparate systems – “swivel chair” work. Whether companies use an old ERP or a mainframe, RPA bots are fit to handle the work.
PwC Takeaway: Life Insurers are adopting RPA faster than P&C Insurers.
Kryons Adds: P&C can benefit tremendously from the use of bots, which can be leveraged effectively for front office work and new business intake.
PwC points out that none of the P&C insurers who responded use RPA in claims or underwriting processes. In contrast, Life Insurers are more readily considering RPA for these kinds of processes. This makes sense, because P&C deals with more unpredictability than Life Insurance – making it less structured and harder to automate.
This is the reality – and it needs to change. We want P&C insurers to re-consider their attitudes to RPA.
Because the term “RPA” originally referred to unattended bots running processes on a VM for “back office” work, insurers may not realize they need a more holistic approach to automation – one that recognizes RPA as incorporating unattended, attended, and hybrid bots who interact with users.
In insurance, many processes are a hybrid of repetitive, bot-friendly work and more cognitive work – particularly, processes that relate to acquiring new business. Forward-thinking organizations are focusing RPA planning on “on-desktop bots” that assist the underwriting and sales staff. The bots are effective with mundane, repetitive tasks associated with research, policy submissions, customer support, and other routines – while humans continue to handle other aspects that require complex decision-making.
PwC Takeaway: The way of the future involves Intelligence Process Automation (IPA).
Kryon Adds: Kryon Process Discovery involves “intelligent” process automation – using AI to prioritize how and where bots are deployed
According to PwC, the way of the future involves what it terms Intelligence Process Automation (IPA), which incorporates cognitive intelligence to execute tasks and update rules based on learned trends.
RPA already involves a degree of “intelligent” process automation. Kryon’s Process Discovery, for example, applies AI in the implementation and prioritization of automation. Routines are still being executed with rudimentary if/then decision-making, but the choice of how and where bots are deployed involves observed patterns and applied business logic.
Bottom Line: RPA is the Future of P&C and Life Insurance
PwC offers encouraging signs for the future of RPA. RPA is more “intelligent” today. A full cycle automation offering includes unattended, attended, and hybrid tasks and – particularly – with Kryon’s Process Discovery, which uses patented AI technology to automatically identify work processes, visually map the main path and variants of any given process, evaluate their suitability for automation and generate workflows instantly.
Companies can improve efficiency using process automation to handle legacy systems with heavy data requirements. RPA can free up time for employees, particularly those in front office work and new business intake, and it allows them to avoid repetitive tasks and replace it with work that has added value.
Want more information about how Kryon can help your organization? Contact us!