Robotic process automation (RPA) is set to change many industries, with the financial services sector likely to be first in the firing line.

Anton Keet, head of risk services at 1Life, examines what RPA is, and how it’s impacting the insurance world in general, and 1Life in particular.


How is technology changing the insurance sector?

Digital disruption continues to change the game in the insurance industry, where insurers are revising their business models in order to stay relevant with customers.

One key change in this space is the intrinsic focus on the claims process – ensuring businesses are better able to expedite claim turnaround times, remove human error as far as possible and ensuring that customers’ interactions with the business are quicker and more convenient.

In fact, a recent McKinsey report indicated that automation of claims can reduce the cost of a claims journey by as much as 30%. Furthermore, research suggests that a large incumbent could more than double profits over five years by digitising existing business. This provides a profound impact to this sector and while cost and competition is not the only driver – backed by more satisfied customers, more productive claims agents and higher growth – it is certainly a key one.

The insurance industry’s technology evolution is well underway. Insurtech is making a meaningful impact on risk management and insurance, with plenty of potential left to explore.


What is RPA and how it is applied to this industry

RPA is the software technology that works based on software robots that use artificial intelligence (AI) to perform tasks – like controlling desktop based applications, collecting items from numerous data bases – dependent on requirements, feeding the gathered data to certain applications and analysing the data that is already gathered from previous processes based on the current scenario.

Robotic and cognitive automation across the insurance value chain is significant. Claims processing is a perfect example given that it is data and document intensive – where lengthy, time-consuming manual processes can be troublesome to both provider and customer, delaying the timely response that customers desire when they file a claim.

RPA, when applied correctly offers better customer experience, less documentation, quicker turn around, more productive claims agents, and less processing time, eliminating errors.


How is the technology able to quickly process a claim and pay out?

When a claim is requested, the technology triggers a series of events that automatically and simultaneously cross-checks all relevant information to ensure that there are no anomalies and that all information is correct and available.

For example, while one robotic process is checking that all rules were followed (accordingly to what has been set up), another is checking the death certificate against a name and ID number, while API links to specific databases are verifying further information.

Once a claim is verified (which can happen in three minutes or less), the system comes to a conclusion either for immediate payment, or to be referred to a consultant for follow up (where anomalies occur).


What risks have been identified and how have they been addressed?

There are different types of risks that can occur at various stages of the planning and implementation phase such as:

  • Sourcing risks: Using the wrong sourcing model can lead to excessive costs, this happens often when organisations decide to do everything internally, lacking the required skills to govern, develop and enact without relying on external advisory, choosing advisors that are not experts in this area or bringing them in after some key decision have been made. It is for this reason that 1Life partnered with an experienced technology solutions provider to remove such risk and ensure a sound system that works effectively.
  • Tool selection risks: Just like cloud-washing, RPA-washing can be a real risk due to the market hype. Many tool vendors claim automation capabilities that lack basis. For example, some vendors just offer screen-scraping which can lead to high maintenance for error correction or changes if it lacks full screen automation features. Therefore, 1Life have ensured that the tools they use are adapted to the business’ specific requirements – where key goals have been set and parameters defined, to ensure the tool provides the most appropriate outcome in the shortest amount of time.
  • Stakeholder buy-in risks: Implementing an RPA initiative requires stakeholder buy-in at different levels across the enterprise. Typically buy-in from the executive suite, IT department, business unit employees, and external stakeholders such as customers and service partners. It is not uncommon for IT departments to write off RPA as a hyped-up technology with low value and potential to threaten stability and security. There would also be risks of the grassroots to look at RPA as a threat to their jobs, hence actively stall or derail its implementation. Hence, 1Life has taken a fully encompassing approach – providing insight into RPA as a complimentary solution to claims agents’ current roles – RPA simplifies them doesn’t replace them – as well as ensuring that all parties of the business from underwriting, to claims and risk are on board with this innovation.
  • Launch/project risks: To mitigate risks of a project launch fail, organisations would need to prevent technical failures, financial failures, and political failures. Hence 1Life is piloting this technology within the funeral insurance space – given the need to fulfil payment as quickly as possible with this kind of event-based insurance. An environment where risk mitigation strategies have already been put into place to manage any potential risks.

To ensure that you overcome these strategies, a lot of research and employing the correct resources will save you a lot of headache and money, finding a team that will go through all the elements and possible challenges and developing solutions and test phases before launching.


What about the human touch?

We can’t deny that human touch is required within customer servicing organisations so that service offerings don’t appear cold and impersonal. However, there are certain functions that require meticulous and precise evaluation, one such as the claims process, and where human touch and technology need to merge to form a stronger, more cohesive and less error-based approach.

Here, as an organisation, we have to ensure that we remove human error as far as possible to ensure that claims are accurately processed, data is captured correctly, and inaccuracies are picked up quickly allowing the customer a smooth, quick and convenient process.

Removing lengthy, time-consuming manual processes can be troublesome to both provider and customer, delaying the timely response that customers desire when they file a claim. RPA assists in easily gathering the data from various sources for centralised processing so that claims can be processed much quicker.


How will this affect customer service going forward?

It will improve customer service by reducing the turnaround time in making a claims decision, as well as in the pay out of such claims – critical to the consumer in a time of need.

In fact, according to a Gartner report, 68% of service leaders indicate that bots  will be more important in the next two years.

And, given how South Africans have warmed up to automated call centre agents because of the efficiency in responses and resolution of issues due to technology being used such as AI and robotics, RPA is yet another innovative solution that is set to improve the service offering space.