What is insurance automation, and what are the benefits?

The future of insurance automation is transforming the way insurers operate, and it’s becoming essential for providers to remain competitive. By automating time-consuming and repetitive tasks, insurers can improve operational efficiency, reduce costs, and provide faster and more accurate customer service. 

Implementing automation with AI can help. AI transcends traditional robotic process automation insurance use cases. But why adopt new technology now? A closer inspection reveals that most competitors may already have.

Why is technology important in the insurance industry?

Technology has become increasingly important in almost every industry today. 

The insurance industry is no exception. Technology can transform insurance companies’ operations, from policy underwriting and claims processing to customer service and communications. 

Why should insurance companies adopt new technology now? Because your competitors most likely already have.

By 2030, McKinsey predicts manual processes, such as manual underwriting, will no longer exist for personal and small-business products across life, property, and casualty insurance. Instead, according to the research, the future of insurance underwriting will be reduced to a few seconds…

Of course, that doesn’t mean humans will no longer be needed or in the loop. On the contrary, automation creates more opportunities for humans to weigh in and provide higher-level thinking. The future of insurance is bright, and the use of smart technologies to automate repetitive tasks will also enhance decision-making.

What is insurance automation?

In short, automation is the use of technology to streamline better customer communication and improve data quality throughout a company’s business processes. There are many opportunities for automation in the insurance industry, and we will examine a few examples.

But what can be automated in insurance? Insurance automation can include everything — from extracting critical data points inside policy underwriting and claims documents — to automating customer service responses. 

Insurance automation can range from simple rule-based technology to more complex systems that utilize artificial intelligence (AI) to remove barriers and augment leadership decision-making. 

What is robotic process automation in insurance?

When most people think of insurance automation, they think of robotic process automation (RPA). 

In the early 2000s, screen scraping software was one of the first use cases of RPA in the insurance industry. RPA involves building a series of steps or rules (called a “script”) to accomplish complex screen tasks. 

Today, RPA in the insurance industry still allows repetitive and rule-based tasks to be quickly automated, but these are generally limited to simple “swivel chair” copy/paste functions. RPA for insurance helps automate data entry, data processing, and triggering responses in other software. 

In insurance, RPA can help with insurance claims processing, life insurance administration, and benefits automation, but there are limits to where RPA can help providers.

Unfortunately, whenever there is a change in the software’s graphic user interface (GUI) or when the document layout changes that an RPA template is built on top of — the entire RPA automation breaks. This means automation engineers have to rebuild the process automation all over again. 

However, this defeats the point of automation. Automation is meant to save insurance companies time and increase efficiency; not easily break when it can’t adapt to change. This can be a major issue in insurance as policies and regulations are constantly changing. 

As outdated tech, it’s the biggest reason robotic process automation needs an AI upgrade. 

How can AI help the insurance industry?

RPA is going on 20 years old, so it’s no longer the shiny, new cutting-edge tech it once was. It’s also severely limited. For example, RPA cannot handle more complex tasks that require human judgment or decision-making — such as underwriting or claims assessment. 

Additionally, RPA needs help with unstructured data. For example, extracting free-form text-based content from emails or handwriting is nearly impossible to process with legacy rules-based automation technology. 

To handle the incoming unstructured data, insurance companies need a new type of automation technology with AI and cognitive intelligence more than ever. There are many examples of AI in the insurance industry; however, there is one clear leader: intelligent document processing.

What is intelligent document processing in insurance?

Intelligent document processing (IDP) is a new type of automation that directly solves the insurance industry’s most unique challenges with unstructured data.

IDP has many native applications of deep learning built in that can help the insurance industry transform unstructured data into business value. Using machine learning (ML), natural language processing (NLP), and deep learning (DL) algorithms, insurance companies have many more opportunities for automation compared to legacy RPA. For example, IDP can automate claims processing, analyze customer data, improve underwriting accuracy, and detect and prevent fraud. 

Here are the five use cases and benefits of using intelligent document processing in insurance:

Uses of automation in the insurance industry

1. Policy Underwriting: Automating underwriting processes reduces mistakes and the manual re-work involved to resolve the errors. Automation can help insurers quickly and accurately evaluate risks, speed up the underwriting process, and make higher-quality decisions on policy applications faster.  
2. Claims Processing: Automating claims processing helps insurers streamline the entire claims handling process, from initial reporting to the final settlement. A more efficient policyholder management process end-to-end can reduce costs, improve turnaround times, and provide faster and more accurate customer service.
3. Customer Service: Automated email responses and routing can help insurers provide 24/7 customer service and support to customer inquiries. By leveraging natural language processing (NLP) and machine learning (ML), Automated Email Classification and Processing systems, such as Automation Hero’s Hero Platform_ can answer common customer questions, resolve simple issues, and even escalate more complex inquiries to the appropriate department or agent whenever the “human touch” is needed.
4. Fraud Detection: Automated fraud detection systems can help insurers identify and prevent false claims, identity theft, and premium evasion. Automation can help insurers proactively detect and mitigate risks by analyzing large volumes of documents. Some automation platforms, such as Automation Hero’s Hero Platform_ use an API that allows existing fraud models to flag the claims needing human intervention for quick batch review before payout.
5. Data Analytics: Automated data analytics systems can help insurers control data quality for compliance and gain deeper insights into customer behavior or preferences, market trends, and risk factors. By analyzing vast amounts of structured and unstructured data, insurers could make more informed business decisions and deliver better products and services to policyholders. For example, Hero Platform can help identify cross-selling and upselling opportunities for existing policyholders. Our platform assesses policyholder information, compares it to others with similar data, and alerts a sales rep or a broker of the cross-sell opportunity.  

Insurance automation ideas for optimizing your business

Insurance companies can increase efficiency, reduce costs, and improve customer experience by implementing these automation ideas.

1. Use AI to classify insurance documents.

Automation Hero’s patent-pending Context-aware OCR scans and understands the intent of any human message. Then, based on the intent, our intelligent document processing platform can automatically classify the attached documents and even automate a response to the request or route the email to the proper department — reducing manual tasks in claims processing so policyholders get service faster.

2. Data extraction and data input 

Automation Heros’ Context-aware OCR can also handle text extraction better than the leading competitor. In fact, our intelligent OCR is 281% more accurate at handwriting recognition than the leading competitor’s — and more than 90% accurate at cursive recognition. 

When you focus this much attention on improving handwriting recognition, performance and accuracy go up for all machine-typed documents too. With industry-leading Context-aware OCR, claims adjusters can turn the unstructured data in handwritten notes, email requests, and receipts into usable business data that automatically gets entered into an internal database. 

3. Compare documents instantly

The best CRMs, document management software, and policy administration platforms need help managing the data points stuck in unstructured documents. However, Hero Platform_’s IDP is adept at comparing data points from multiple sources and analyzing them with above-human accuracy. For example, data quality teams typically check policies against outside sources to verify insurance company records are correct — such as property records and other databases. Hero Platform_ validates all of these data points in one go, reducing the amount of human error in the process.

4. Fraud prevention

Underwriters can’t assess the risks of new customers if the data they have on them (or their assets) remain stuck inside inaccessible documents. Likewise, claims adjusters mitigate similar risks to prevent paying out money on fraudulent claims. 

Hero Platform_ can look up account information stored in other places and compare the historical data with documents customers submit — speeding up data input and output throughout the underwriting and claims processes.

Our platform can even incorporate existing fraud models triggered by high claim amounts or fatalities. In addition, our human-in-the-loop attended automation will flag the claims that need human intervention for quick batch review before payout.

5. Optimizing Sales Outreach

Hero Platform_ can assess policyholder information, compare it to others with similar data, and alert a sales rep or a broker of a cross-sell opportunity. For example, our intelligent document processing platform can help your marketing team reuse the existing data in your company’s CRM and policy management platform to show sales agents all relevant details of a customer’s record, such as age, past purchase history, and the next best product that might interest them.

6. Process proof of prior insurance documents

One of the most common steps in onboarding new insurance customers is checking for proof of prior insurance. For example, customers interested in new car insurance might submit several policy declaration documents to prove they had insurance through another carrier. These might include ID cards, current carrier reports, renewal billing notices, or cancel/non-renewal statements.

7. Canceling or renewing an insurance policy automatically

Since Hero Platform_’s AI detects intent, it can determine if the email request is a renewal or a cancellation request. This means using our Context-aware OCR to extract relevant information from the email or attachment for essential details like the policy number, customer’s name, send date, and sender name. 

Hero Platform_ then performs a series of checks verifying that the sender’s identity matches the policy. If everything lines up, Hero Platform_ alerts your ticketing system to close or renew the policy and even sends a billing notification with the appropriate reply.

Conclusion

Insurance is highly regulated, and even the most prominent providers hesitate to adopt new technology. But this results in an industry buried in outdated document processes that gum up an organization’s ability to adapt.

For example, processing claims fast is one of the most critical parts of policyholder satisfaction and insurer reputation. But, if your adjusters are buried in documents during a natural disaster, they can’t focus on the most sensitive cases. 

Hero Platform_’s AI reduces the time dedicated to processing each claim, freeing up adjusters to bring their A-games to the highest-risk policies. Automation Hero can help you too.

Get started with insurance automation today

Learn how we helped, Markerstudy reduce their claims processing time by 40%. Additionally, learn how we reduced total claim processing time by 80% for another multinational insurance partner — cutting down manual tasks from 10 minutes to just two minutes per claim.

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