Modernizing the Insurance Industry: The Missing Link

If you work in the insurance industry, a bad day at work might look like this. One customer announces that she’s cancelling her policy and going to a competitor after experiencing delays in exchanging the accident reports, appraisals and other documents needed to settle and pay her claim. Later that day, another prospective customer complains that your company took too long to qualify him for a policy compared to the other ‘online’ companies he’s evaluating. Your colleague’s report failed compliance audits in large part because they are having difficulties with locating the right documents to resolve legal disputes. All of you are frustrated – not only because you’re losing business, but because your attempts to improve your processes and accelerate your responsiveness have failed.

Unfortunately, the above scenario can be a common one even when you think you have automated your core systems and processes. Your staff may grow tired of repetitive and mundane tasks and struggle to deliver swift customer interactions and good data management with a customer experience that involves fewer, but more purposeful customer touches. In the meantime, agile FinTech and InsureTech offerings may be siphoning off your customers with their streamlined, consumer-centric processes delivered on easy to use, customer friendly mobile apps via their smartphones.  Today’s insurance customers are more tech-savvy, demanding personalized services and answers delivered in real time with minimal human intervention.

These challenges are so common that many organizations are turning to robotic process automation (RPA) to remove friction from the customer experience. Bots are now used for everything from front-end request management to back-office process automation.  Benefits include automating repetitive routine tasks, protecting document integrity, and accelerating the process lifecycle with less human intervention. But while RPA has been sold strategically, leaders are reporting challenges. One global study from Pegasystems Inc. has found that RPA can be more difficult to deploy and require more maintenance than expected.  And gains in automation have fallen short of expectations set for buying these solutions, due in large part to the fact that they are automating the wrong processes or not automating the entire process. 

Another challenge? Leaders are realizing that RPA can only automate processes, not fix them. When organizations can’t spot the hidden process flaws that are costing them revenue and efficiency, they often invest budget in automating the wrong areas – and wonder why they aren’t seeing more dramatic improvements.  Not surprisingly, automating a bad process yields poor results. What is surprising is that most insurers don’t really know how their processes are working and where automation can actually make a difference.

The High Cost of Low Efficiency

Like every industry, insurers operate in a digital world. Today’s consumers seek a smooth and agile user experience from their banking and insurance providers. But many traditional insurance companies are mired in older, opaque processes that get in the way of the speed and personalization of experience customers are now expecting. Insurance is a document-driven business, but its processes and automated systems run on data. In today’s appified, mobile era, customers want more control over insurance processes and expect to drive the pace of interactions through a navigable and visually appealing interface. For all of the investment made in digital transformation and process automation, the questions surrounding how required documents interact with these processes is still an afterthought.  Even worse, without actually knowing how their processes are working, insurers focus their resources on gaining efficiencies in bad processes.  The most critical step to achieving the benefits of automation is discovering how processes are actually working.

Consider these typical challenges:

• Customers are annoyed because it takes too long to hear back on new policies, payments or claim adjudication. They want to take the reins, instead of waiting around for back-end processes to respond.
• Manual and document-driven workflows hinder completion for underwriting, risk assessment, research, policy analysis, claim processing, subrogation or audit preparation – all because document processing itself is not fully understood or automated.
• Teams struggle to extract, digitize, share or classify data accurately from their documents, which can harm their compliance audits, obscure fraud and delay customer response.
• Unable to measure their process performance, they try to optimize inefficient processes with technology – but the underlying processes, rather than their automation, sabotage their results.

So why isn’t RPA yielding the expected rewards? It’s not that digital transformation – specifically, robotic process automation – isn’t valuable. It’s because leaders lack the visibility into their own processes needed to implement the right automation strategies. They don’t know where their processes are weak, how much time teams are spending on different tasks, where the blockers are and where they lose document integrity.  As a result, they invest heavily in technologies that may actually automate the wrong processes.

Driving Smarter Digital Transformation

The adeptness of an insurer’s document management and process efficiency determines their ability to compete on the field with newer, more nimble online insurers. To apply automation where it will do the most good, leaders must understand the real efficacy of their workflows and processes. In order to do this, insurers must first take an honest, fact-driven look at their processes.  From there they can discover how documents are moving through, or breaking, these processes.  RPA alone cannot address the industry’s challenges without a good understanding of the processes themselves - where manual errors occur, how data extraction is working, where customer attrition and response speed are most acute. But the right document processing solutions, starting with good process discovery and assessment, can amplify RPA’s power, increase efficiencies and boost ROI.

There’s never been a better time to offer insurance customers a new world of digital convenience and consumer-centric processes. But to cater to 21^st century expectations, insurance leaders must guide digital transformation into the right areas intelligently – using a roadmap of accurate insights.  Only then can they drive retention and revenue and deliver a customer experience that keeps them on top.