Business Case and Benefits of RPA
The rapid adoption of RPA is no surprise, considering the significant value it can deliver, including:
■ Increased efficiency and productivity;
■ Accelerated cycle times for key processes, such as policy issue,
claims processing, and the financial reporting statement close;
■ New and improved sales and customer service interactions
and delivery models;
■ Improved quality, consistency, transparency, and controls; and
Robotics can increase profitability and enhance the customer
experience by improving responsiveness and communication while
lowering resource costs. For example, in property and casualty (P&C)
insurance claims processing, the speed of settlement is directly
related to both the cost of the claim and customer satisfaction.
Part of the appeal of RPA is its noninvasive nature. Typically,
robots can be overlaid on existing systems environments and interact with and across all of the same internal and external systems
as humans. This ease of integration contributes to a compelling
business case for RPA in comparison to some transformation and
modernization initiatives because:
■ Upfront investments are relatively modest;
■ Payback periods are relatively quick;
■ Return on investment is attractive; and
■ Implementations can be achieved with modest demands on
key IT resources.
The bottom line: RPA offers value whether deployed as part
of a full modernization program or as an incremental step in
automating and streamlining specific recurring processes, sub-processes, and tasks.
The Rise of Robots
Because the benefits and business case align with the goals and
objectives of many insurers, it is easy to see why robotics is quickly
gaining traction in the industry—with forecasts calling for much
broader adoption in the coming years.
A landmark 2013 study by Oxford University[ 4] found that
a number of insurance jobs—including those in underwriting,
claims settlement, and policy processing—were among the most
likely to be handled by robots, or via “computerization,” with a
probability of at least 98 percent. While specific finance, actuarial,
and tax-related roles were not included in the study, EY’s experience confirms that insurers also have an appetite for automating
these activities. Indeed, these changes are already taking place.
It’s not just the insurance sector that is automating work
through robotics. According to Gartner[ 5], about one-third of all
customer service interactions are now handled without any human
interaction. By 2020, that number could reach 85 percent. As for
costs, EY’s research has shown that RPA can reduce the cost of
manual operations by 25 to 40 percent.[ 6]
ISTOCK/ ILEXX
RPA in Insurance
Due to the compelling value proposition, many insurance companies
have begun using robotics to automate standardized processes,
including those in claims processing, policy administration, underwriting, accounting and finance, actuarial, and tax.
Most insurers present a “target-rich environment” for RPA
thanks to their:
■ Complex web of legacy systems and inefficient manual processes;
■ Need to enhance the customer experience to succeed in digital
channels; and
■ Need for increased efficiency to remain competitive and fund
innovation and growth initiatives in a time of thin profit margins.
Companies are exploring opportunities for automation in key
actuarial processes and tasks, including:
Companies weighing RPA should consider the success stories
of early adopters. One life insurer used RPA to automate some of
the essential steps in its cash-flow testing process. When business
units submit model results to corporate actuarial, a robot performs
Property and casualty,
accident and health Life and annuity
■ ■ Data preparation—
extraction, reconciliation,
and formatting
■ ■ Reserving analysis,
including rules-based
selection
■ ■ Standard report preparation
■ ■ Pricing and rate monitoring
■ ■ Rate filing and rating quotes
■ ■ Experience monitoring and
trend analysis
■ ■ Financial planning
and analysis support—
preparation and calculation
of scenarios
■ ■ Data visualizations
■ ■ Modeling and forecasting—
model runs and updates
■ ■ Valuation and reporting
■ ■ Reinsurance administration
and reporting
■ ■ Experience monitoring
■ ■ Product development and
pricing
■ ■ System conversions
■ ■ In-force administration—
”workarounds” for existing
policies
Thanks to the drive for more
customer-centric offerings,
transformation and modernization
programs, and associated technology
innovations, the future work of
actuaries and others will be vastly
different than their past work.
