The growth in innovative technologies, combined with ideal market conditions and the rise of the digitally-empowered consumer, is helping to accelerate an outcomes-focused operations and technology (O&T) agenda. Robotic Process Automation in Insurance: An ACORD / Capgemini Perspective offers an in-depth look at the opportunities and challenges surrounding this emerging technology.
In a perspective paper from April 2017 entitled Robotic Process Automation in Insurance, global leader in IT consulting Capgemini presents the findings of a recent ACORD study examining digitisation in the insurance industry. The report begins by describing a new era in insurance, of which the cornerstone is digitisation. This new era is driving an outcomes-focused operations and technology, or OT&T agenda, and increasingly, CIOs and COOs are collaborating in order to attract, retain, and develop customers while preserving their focus on administering and transforming the current business and IT infrastructure.
Although the rise of digitisation is hardly new to the industry, many insurers still struggle to implement new digital tech solutions effectively. The variety of causes for this inability to adapt is vast; however, a number of common barriers exist, namely:
- Accumulated legacy systems that are characterised by outdated tech that typically features complex infrastructures made up of siloed applications and supporting system architecture
- Complex business models, especially in underwriting and claims
- Lack of vision, support, and talent necessary to implement & manage a digitized process environment
- Impact organisational silos that include multiple, complex balance sheets, as well deficient transparency and collaboration throughout the enterprise
- Marketplace disruption caused by factors such as emerging competitors and shifting compliance and governance requirements.
More often than before, O&T professionals and business leaders, among them insurers, agents, brokers, and reinsurers, turn to Robotic Process Automation (RPA). RPA refers to the combined use of software with artificial intelligence and cognitive computing technologies to mimic the activities of humans conducting highly repetitive tasks. Current estimates forecast an annual growth of spending on RPA tech ranging from 30 to 60 percent, and the market now shows promising potential to surpass USD 1 billion within the next five years, despite the fact that current estimates put RPA spending by banking, financial services, and insurance firms (BFSI) between USD 50 and USD 500 million. Within the sector, the increased need for strategic flexibility, operational adaptability, and process efficiency is helping to push the remarkable growth of RPA.
What is Robotic Process Automation (RPA)?
Robotic Process Automation, or RPA, is a software application that combines user interface recognition technologies with workflow execution tools. Its software is programmed to follow predetermined actions within specified applications that replicate, and therefore replace the human interaction that was previously required to be able to complete required activities within a business process. Capgemini describes five key elements that are generally expected within RPA solutions regardless of the level of human interaction involved, namely:
- Non-intrusive business system integration
- Data aggregation of information collected through multiple back-end systems
- Business rule execution based on defined logic and self-learning
- Work item and exception queuing
- Activity monitoring
After its introduction to the topic, the report goes on to outline the key opportunities and benefits that RPA is able to offer to the insurance world, and further mentions considerations that must be taken into account when implementing these solutions. The conclusion of the perspective paper highlights seven critical success factors of Robotic Process Automation, again emphasising its myriad potential to serve as a critical component of an outcomes-focused operations and technology (O&T) agenda.
To read or download [PDF] the new report – Robotic Process Automation in Insurance: An ACORD/Capgemini Perspective – click here.