Automation is meant to drive tangible business benefits across different sectors including the insurance industry. Traditionally, this industry is highly regulated and cautious but it is facing a radical shift because of the increasing benefits of intelligent technologies.
These days, many insurance companies have deployed an automation strategy in areas such as finance, new business processing, claims processing, and more. The entire industry is assessing the use of cognitive automation as a part of its strategic development approach to boost business efficiency and lower operational costs.
The Immediate Effect of Digitization on the Industry
The introduction of technologies, P2P insurers, and insurance tech players makes the insurance market more competitive and robust than ever. But, despite the opportunities that digitization can crate in the industry, it comes with some newer challenges for conventional players. Because of low-interest rates, legacy insurance firms experience a decline in revenue streams. This is because the premiums of investing customers in many financial institutions aren’t paying the same returns as before. Such a challenge may increase in the future as a result of digitization and changing customer preference. But, insurance companies that have innovated their products embrace digital transformation have seen growth.
Common Challenges that Come with Automation Adoption
As insurance companies try to adopt automation, some of them may face any of the following challenges:
- Dealing with a mixed data format. In the insurance industry, data is collected electronically and on paper. As a result, it becomes very difficult for cognitive technologies to play their role in an efficient way. As companies deal with mixed data format, they have to transfer the data into their machine. This approach can be costly and increase the possibility of human errors. But, insurers can overcome these challenges by investing in Insurance consulting services & solutions.
- Using several legacy applications. These days, bigger insurance companies make use of many legacy applications and point solutions. This results in operational inefficiencies and excessive costs that administrative functions use.
- Using several manual processes. Operating an insurance business involves different manual processes that are often time-consuming and labor-intensive. In fact, these processes are often repetitive in nature including renewing premiums, underwriting, and conducting compliance.
Automation in the Insurance Industry: What Lies Ahead?
As cognitive automation in the insurance industry is becoming more sophisticated, companies will be able to cost-effectively meet changing regulatory requirements. Also, insurance providers will be able to focus on strategic long-term problems. By adopting smarter technologies like robotic process automation, machine learning, and artificial intelligence, the industry will be able to lower costs, optimize the customer experience, as well as improve decision-making and productivity.