The industrial age marked an exponential increase in production and quality because of the economies of scale that resulted from the introduction of machinery that helped mass produce uniform products, with little to no variation or defects. In the digital age, robotic process automation (RPA) is doing the same thing, except for administrative tasks and business processing workflows. According to Investopedia, RPA is essentially software that can be ‘taught’ to execute tasks easily across applications, much like humans do.
This robotic software is revolutionizing insurance back-office processes as it can be programmed to execute tasks in a preset order across multiple applications. Some of these tasks might include in-taking registrations, sending receipt messages, checking insurance documentation for completeness, processing claims, filing forms, and updating databases. The RPA is trained to manipulate data across applications and platforms and can not only launch, but also operate, multiple software at the same time. It was specially designed to help lessen the burden of time-consuming and repetitive tasks at the back-end of business operations. So how will this software impact the insurance industry? Let’s take a look.
Improved Processing Times
To begin with, it is important that insurers implement robotic process automation to replace current manual processes so that they may gain from zero human errors and reduce the amount of time spent on each claim from about 3 hours to approximately 3 minutes. Some companies experience up to a 70% reduction in processing times with an RPA solution. This is because the RPA can imitate human interaction with cross-functioning applications at breakneck speeds.
It is understood that because RPA is fundamentally software, it can run the entire year without significant breaks or downtime. It is also possible to modify and program thousands of RPA applications simultaneously, which saves insurers a lot of time and results in productivity gains. Some insurance providers have reported gains in productivity of up to 50% in a host of insurance processes using robotic process automation.
Rapid growth necessitates the rapid scaling of processes, which is unachievable in manual, paper-based environments. With RPA, scalability is no longer an issue as it is easy to scale up or down the number of RPA software robots that are active, based on how many quotes or claims need to be processed at that time of year. Through the implementation of robotic processing automation, some insurers have been able to adjudicate claims up to 75% faster, just by auto-populating close to 100 data points onto a centralized document without any manual intervention.
Claims processing usually involves collecting and processing large amounts of data from different sources for verification and settlement purposes. Insurance providers can cut costs by replacing repetitive clerical tasks with RPA because automation increases the working capacity of a firm without having to take on any additional costs. In some cases, insurers have experienced as much as a 50% reduction in costs with respect to insurance policy processing alone. This cutting of costs also applies to labor costs as fewer resources and personnel are required to carry out the necessary tasks once automation is in place.
As we have established, RPA is a useful business tool for insurers that are looking to scrap outdated systems and gain a competitive edge in the market by leveraging the wonders of emerging technologies. The implications of RPA adoption are massive in the insurance sector. Implementing robotic process automation has been shown to reduce claims processing times, overhead costs, cycle time, and downtime overall. With more sophisticated processing capabilities and better streamlined operations, it is easy to see why employing RPA results in increased productivity, scalability, and accuracy. In this way, it is crucial that insurers the world over give careful consideration to the potential ROI robotic process automation offers because without it they might just be left behind.