In an environment characterized by low interest rates, market overcapacity, tougher competition and growing regulations, insurers are increasingly looking to automation as the answer. For many, robotic process automation (RPA) has appeared to be the best bet for cutting costs quickly. One would think that in a data-driven industry, with high-volume, repetitive manual processes, RPA would be the ideal solution. Unfortunately, that is not entirely true. For insurers that applied RPA as merely a cost-cutting tool capable of fixing any process, the technology turned out to be an automation hammer when their processes actually needed a more refined Phillips-head screwdriver.
Intelligent process automation (IPA), meanwhile, enhances software bots with cognitive technologies that mimic human perception and judgment such as artificial intelligence (AI) and machine learning (ML). But IPA isn’t proving to be an easy transformation for the industry either. In our experience, too many insurers see robotic automation as a silver bullet for reducing headcount and improving profits.
Insurers wading through tough automation decisions must keep in mind that crossing the chasm will not be easy for them and their employees. But companies that develop a holistic strategy that combines RPA with cognitive technologies can cut costs now and achieve benefits that position them for success in the years ahead.