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3 RPA (Robotic Process Automation) Use Cases in Insurance

3 RPA (Robotic Process Automation) Use Cases in Insurance

Robotic process automation, or RPA, has the potential to dramatically change what the workday looks like for millions of employees. Some of the most compelling RPA use cases are in insurance, where this technology can transform compliance from an ongoing source of headaches to a set-it-and-forget-it system that runs seamlessly in the background.

Even better: while compliance is maybe the most compelling RPA use case in insurance, it’s far from the only one. Here, I’ll highlight three ways the insurance industry can streamline operations with RPA.

Background: What Is RPA?

Briefly, RPA is a kind of automation that involves programming software (also called robots or bots) to carry out definable, repeatable, and documentable tasks. As a general rule, any work that is definable, repeatable, and documentable is a candidate for automation with RPA.

RPA’s transformation potential lies in its ability to reassign to bots the most mundane, “mindless” tasks that workers have to do. This frees up human workers to do the kind of interesting, engaging work that’s actually enjoyable. Let’s look at a few examples.

RPA Use Case 1: Compliance – Eliminating Human Error

Compliance is a struggle for nearly every insurance company, not because of bad intent but because it’s complicated and it can vary by product and multiple times in a year! And the more a company grows, the more complex its compliance requirements become.

Even with an entire department dedicated to compliance, there’s lots of room for mistakes and therefore fines and other downstream problems, such as Market Conduct interactions.

The good news: compliance is a dream use case for RPA.

Why? Because the tasks associated with staying in compliance are definable, repeatable, and documentable.

Consider, for example Know Your Customer (KYC) requirements. One insurance company I worked with had an entire department dedicated to verifying and validating KYC data. They were using legacy (read: non-automated) systems to do this and were responsible for processing tens of thousands of documents per month.

As you can imagine, this was thankless work. If they got everything exactly right, their work was invisible. It was only when things went wrong that they got attention.

The reason this particular firm reached out to us was that the work of maintaining compliance was leading to delays in policy issuance. Obviously, that’s a big problem: in some cases, customers who needed coverage didn’t have it by their requested start date. 

That created the potential for a big, unexpected surprise if one of those customers tried to make a claim, which of course created the potential for lawsuits and regulatory activity outside or inside the legal concerns.

Clearly, the status quo wasn’t sustainable.

We had to find a way to automate the review of those tens of thousands of documents to speed up the process and eliminate the potential for error. Here’s what we did:

  • We fed a lot of sample documents into an AI computer program that could recognize letters and numbers (via optical character recognition, or OCR).
  • We established that the program was interpreting those documents correctly.
  • We built an RPA model to replicate the OCR process.
  • The insurance company fed its new KYC documents into the program, and the program used RPA to automatically process them and make the appropriate decision.

The outcome was not just time savings and greater accuracy. Our RPA program was also able to create data tables for data that wasn’t organized in the original documents. This made the data trackable and extremely easy to audit.

We also built a dashboard to show at a glance the status of KYC documents and decisions – hugely helpful for bigger-picture decision making.

RPA Use Case 2: Claims Processing – Making Better Decisions Faster

As I mentioned earlier, compliance isn’t the only RPA use case in insurance.

Other tasks essential to running an insurance business are also excellent candidates for automation — claims processing, for example.

In car crashes, getting insurance money to customers fast is essential for their satisfaction and ability to live their daily lives. In some jurisdictions, you can even be fined for not meeting payment speed standards.

Insurance companies can use RPA to review claims and make decisions about whether or not they qualify for payment.

Only if a case falls into a gray area does it get handed off to a human. This means claims processors can spend their time reviewing complex or unusual cases that require additional information or critical thinking — while still ensuring that every claim is handled in a timely manner.

RPA Use Case 3: Invoice Processing – Streamlining the Boring Parts

The RPA use case for insurance invoicing functions in a similar way: automating definable, repeatable, and documentable processes frees employees to engage in more interesting work.

RPA could, for example, handle all invoice processing using OCR or AI functions similar to what I described in the KYC example. Or a company could build an RPA bot only for handling exceptions – missed invoices, any sort of problem, etc. 

Whatever the biggest invoicing pain point is for your insurance company, RPA can solve it, so long as it’s definable, repeatable, and documentable.

RPA Frees Insurance Professionals to Do the Interesting Work

If you’re having trouble visualizing how RPA might transform your insurance company, think back to the days when humans operated telephone switchboards. Before automated dialing, human beings had to connect wires for every call. Without automation, it would have been impossible (and prohibitively expensive) to expand access to the telephone beyond a few hundred people in each city.

Similarly, insurance companies that introduce RPA can eliminate repetitive tasks that don’t require critical thought. The result: employees are freed to innovate, engage with customers, and find other meaningful ways to make life better for the people they serve.
Intrigued by the potential for RPA to transform your operations? Not sure where to start? My advice: think about a pain point in your current operations. If it’s definable, repeatable, and documentable, you can use RPA to automate it. When you’re ready to discuss what the right RPA solution might be, get in touch. I’d love to talk it through!

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