Automation of cognitive tasks is transforming the (re)insurance industry and, as a result, the way by which (re)insurers should adapt their business in order to gain an edge or keep pace has been moving steadily up the boardroom agenda.
Motivations and opportunities for action are diverse and will often overlap – improved understanding of risk, better customer service, time and cost savings, more targeted and engaging marketing, competitive necessity and stronger financial performance, to name a few.
The technologies and methods for achieving those kinds of objectives are similarly varied. Enhanced predictive models in, for example, underwriting, pricing and claims; as well as the application of artificial intelligence (AI), machine learning, data enrichment, the Internet of Things, mobile apps and blockchain, are just some of the options that can contribute to what we like to refer to as ‘intelligent automation’.
Towards intelligent automation
The thing about intelligent automation is that, important as it is, the technology itself is not the be all and end all. Intelligent automation is not a siloed activity and it still, most certainly, involves people. It raises some high-level challenges that will need the time and attention of the business as a whole, such as:
- How will new technologies integrate with existing systems?
Legacy systems are a fact of life for most (re)insurers and will often represent years of investment. Careful thought needs to be given to how to promote connectivity when implementing automation, including the benefits of capturing both structured and unstructured data, so that people within the business and customers who need information have it, when they want it.
- Do we have the right organization, culture, and skills to make automation work for us?
Intelligent automation impacts how work is done by automating some tasks and augmenting human productivity and effectiveness in other tasks. Business needs to tap in to a new and different talent stream for some aspects of automation, while asking existing employees, such as underwriters and claims handlers, to work in new ways. Business culture, training, skills and career development, working practices and reward structures need reviewing as work changes.
- Should/how do we harness the innovation of InsurTech businesses?
Going it alone is an option if the skills are available (see above) but will also take time. Many early stage InsurTech companies have moved their focus away from aiming to compete with incumbent insurers to collaborating and partnering with them, particularly in back-end operational activities. But there are literally thousands of them, so picking and choosing the ones that can make a difference to your business may be difficult.
The point is that automation in (re)insurance, or intelligent automation at least, needs an inter-connected, business-wide approach, albeit with a technological flavor.