The financial viability of the insurance company business has been questioned for several years. McKinsey’s 2022 Global Insurance Report shows that 52% of companies worldwide had a return on equity (ROE) compared to their cost over the past five years. Although many insurers predict that premiums will continue to rise in 2022, following the growth of the 2020 pandemic 1.2%many non-pandemic obstacles remain, including changing consumer preferences and the rise of advanced technologies that have challenges.
Intelligent automation (IA) can upgrade this old model, and replace it with a more efficient and profitable one. By integrating IA into claims, underwriting, pricing, and distribution processes, insurance companies can improve margins, productivity, and customer and employee satisfaction.
Why do insurance companies fail?
The insurance industry is at a crossroads, struggling to maintain profitable operations. Price transparency has made it easier for customers to look for cheaper options, while the growth of technology has increased price range and speed, leading to more competition.
Property and casualty insurers have struggled to cut costs in recent years. All companies have seen their ROE fall slightly in value – except for insurers, the only sector to see economic growth. These opposing forces are further enhanced by the lack of demand for growth in mature markets. These companies rely heavily on price increases rather than expanding customers and new offerings.
One of the industry’s biggest risks is a shift in growth that depends on inflation. The division must open up to the demands of the customers, improve the production of profits and increase the growth and efficiency. Advanced technology can do this, resulting in lower costs, improved customer and employee experience, and improved decision-making and productivity.
Why has digital transformation become important for the industry?
The changing demands of the market require the insurance companies to work very quickly. As McKinsey says“Whwhat used to take years can be done in months or weeks.” This can be done using the power of intelligent machines. By integrating IA, insurers can reduce their turnaround time, adjust workloads, and significantly reduce errors, which are more common when human workers are left to perform repetitive tasks. This gives employees time to step back and help them develop new strategies, focus on critical cases and deliver customer-facing experiences.
This is especially important given the company’s competitive environment a “dealing with the customer.” Eatingrs expect the convenience and ease of digital transportation but still need the personal support that only human employees can provide. This is where insurance companies can differentiate themselves – by beating the odds good between automation and human interaction.
The rapid growth of insurtechs—organizations that use technology to improve savings and productivity in the insurance industry—also highlights the importance of IA for business growth. Their threat to traditional insurers is confirmed by the world’s ever-increasing financial burden from $1 billion in 2004 to $14.6 billion in 2021. Insurtechs provide superior customer experience and tend to focus on the retail and distribution side of the value chain, as well as property and casualty. These values show the areas that are adding value to the rest of the company.
How can the insurance industry support the power of intelligent machines?
For many insurance companies, changing from legacy systems and redundant operations in the face of budget constraints can seem daunting. However, insurers can work with an automation partner to ease this process. Such partnerships help them to get the most out of their existing systems, using digital workers to work between existing systems and connect data between applications. This approach allows insurance companies to eliminate their replacement systems by forcing them to do everything at once.
By using this flexible workflow, tasks related to onboarding, data analysis, claims fulfillment, and invoicing can be automated, reducing the burden on human resources and, in turn, driving innovation and new revenue streams. This automated management system helps insurers streamline the customer journey, respond quickly and ensure compliance with the latest regulations. And, the results from IA products free up a lot of resources, insurance companies can improve the process and change the established practices, increase the cost and return.
Thomas Millera leading international insurance company that handles 80 percent of the world’s containers, works with SS&C Blue Prism incorporating intelligent automation into its operations. The service provider was looking for solutions that worked with its “low cost, low cost” model and did not want to install new IT equipment. As a result, the company was able to see a high ROI, increase efficiency and resilience, improve operations 24 hours a day / seven days a week, improve accuracy and reduce turnaround time, and give underwriters more time to focus on creative work. . This ultimately helped transform the customer experience, a key differentiator in today’s industry.
Although the need for insurance is eexpected to keep rising this year, especially in emerging markets, the company’s long-term outlook will depend on its ability to adapt quickly. Advanced digital technology can boost the competitiveness of insurance companies or make them obsolete. The future importance of the insurance industry will depend on its willingness and commitment to adapt to these changes.
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