Robotic process automation trends and possible implications for the insurance industry
A few years ago, Robotic Process Automation (RPA) was a brand new technology. McKinsey already predicted in 2013 that technologies for automating knowledge work will be extremely important in the future. A few years later, the first companies were then already starting to use RPA at a larger scale. Thanks to the outstanding results achieved with RPA, the technology quickly gained a foothold and is now being tested by a number of companies and gradually scaled up throughout the entire organization. Within a short period of time, RPA has gained popularity and in 2018 it recorded the greatest growth in the market for enterprise software. Today, RPA is an important technology for companies around the world. The insurance industry was one of the first industries to start using RPA to perform proof of concepts. But what is the future of RPA, what trends can be observed and how can insurers benefit from them?
Hyperautomation and robotics as long-term trendsetters
Looking at the global development of the software industry, according to Gartner, revenues from sales of RPA software grew by 63.1% in 2018 alone. This makes RPA the fastest growing segment in the global market for enterprise software. This is not surprising, since among the top 10 Strategic Technology Trends for 2020 recently published by Gartner, three trends are directly related to automation: hyperautomation, autonomous things and AI security.
With hyperautomation, organizations quickly identify and automate as many business processes as possible. To do this, they use a combination of tools such as machine learning (ML), software and all kinds of other automation tools. To stay at the top, IT executives need to ensure that their organizations are ready to move beyond simple, task-based automation such as RPA and are also able to automate more complex processes.
Autonomous things include drones, robots and other devices that perform tasks normally performed by humans autonomously in a variety of environments (e.g., in the water, in the air or on land).
As automation and robotics advances, new security vulnerabilities are emerging with potential points of attack. This is where AI security comes into play: the impact of artificial intelligence (AI) on security must be analyzed by companies. Modern technologies such as ML can also be used to identify patterns in attacks and to better defend themselves against them.
COVID-19 as driver for automation
The negative economic implications of COVID-19 have led to a downturn in the global economy. Various companies are fighting bitterly for their existence. But instead of simply laying off workers, the crisis is being used to drive automation within the company. The Automatica Trend Index also shows that companies are increasingly turning to automation during the crisis.
Robotic Process Automation – Top of the range enterprise software
Looking at the sums of money flowing into RPA, it quickly becomes clear that growth will probably not stop for the time being. According to Gartner, 85% of companies that exceed $1 billion in revenue will use RPA. So, RPA has become a no brainer and the question of whether RPA is a good investment is almost non-existent.
Looking at the expenditure on RPA over time, it quickly becomes clear that it will become an ever bigger topic in the future. Even for SMEs. According to HFS Research, spending is set to rise to over USD 10 billion in the next three years.
However, the trend towards automation does not only affect RPA, but also affects more complex areas. Intelligent Process Automation (IPA) and Artificial Intelligence (AI) will also both continue to gain in importance. The goal of RPA is to automate repetitive tasks, while IPA is, so to speak, an upgrade of RPA. IPA allows more complex processes to be modelled and implemented. Technologies such as Natural Language Processing (NLP), Machine Learning and Data Extraction make IPA a smarter solution than traditional RPA technology. Optical Character Recognition (OCR) has also been further developed with the help of these technologies and is now able to recognize structured and unstructured data of any document. Without the use of templates. Since the insurance industry has to process a large number of documents and data, this technology is particularly suitable for automating document extraction. Building on this, there is an enormous potential for the more comprehensive development of business process automation.
RPA in the insurance sector
RPA is ideally suited for insurance companies, as many business processes are repetitive, rule-based and document-heavy. This is why the insurance industry was one of the first to witness a far-reaching implementation of RPA.
Employees who are part of one of the central processes in the insurance industry, such as underwriting, claims registration and processing or policy issuance and renewals, know how much information from many different sources is involved. Back-office processes are the core of every insurance company and these processes are increasingly flooded, slow and inefficient. These are the ideal conditions for a profitable use of RPA. The use of RPA can also help insurance companies to comply with regulations properly, as each task of a robot is monitored and recorded at all times.
One of the biggest challenges for insurers is selecting the most suitable processes for automation. The primary selection criteria are the value that automation brings to each process and how easy it is to implement. To do this, insurers should analyze the various internal processes and evaluate where it would be worthwhile to implement an RPA.
A leading global insurance company has successfully automated many repetitive manual tasks using RPA, saving 18,000 man-hours and reducing costs by ￡140,000 – all in just six months.
Another large insurance company improved processing times by 600% while reducing onboarding costs by 91%. This resulted in 2,000 hours per month of saved working time while improving service quality and customer experience.
These results are impressive and most of them are similarly achievable in other organizations. If you yourself are interested in using intelligent OCR software for your business and are taking the first step towards the further implementation of RPA, please register for a 14 days free of charge test account via the banner below or contact our trusted partner and expert for RPA: ESGroup AG. In cooperation with ESGroup AG, we can identify inefficiencies and develop solutions that will help your employees to further expand and improve your value proposition for your customers.