Currently, many insurance companies are turning to robotic process automation to bolster business performance by improving  efficiency and containing costs. Early results have been impressive.

Capacity increases of as much as 40 percent have been achieved by some carriers in their back-office environments. Moreover, costs and processing times have been cut in some pilot projects by a staggering 80 percent. Activities such as capturing data in and between insurance applications, processing claims, tracking settlement costs, and updating records are ideally suited to robotic process automation. They’re all high-volume tasks that are rules-based and repetitive.

Spurred by the success of their early experiences, some insurers are looking to extend these initiatives. They’re keen to spread the use of robotic systems throughout the organization to gain further business benefits. At the end, this is an Operational Excellence (cost and quality) game and thus needs careful consideration across complete business units.

Thus, watch out. By rushing to roll-out robotic systems throughout your business you risk falling into some big traps. Here are some of the main pitfalls:

  • Tunnel vision – Neglecting other potential benefits of robotic process automation is a common mistake. This technology can achieve far more than just improve efficiency. It can also help organizations become more agile – a big advantage in the new digital economy. Barclays and the Co-operative Bank in the UK, for example, have used robotic systems to release large numbers of their employees from back-office tasks. They’re now deployed in more critical activities, such as customer service, where human qualities like empathy, resourcefulness and innovation are valuable.
  • Silver bullet – Some organizations believe that robotic process automation is the perfect solution for efficiency bottlenecks throughout the enterprise. This is a big mistake. Not all processes are suitable. It’s important to carefully analyse the tasks that could benefit from further automation. Routine, high-volume, rules-based processes tend to be good candidates. But tasks that involve any form of judgement are often unsuitable.
  • Lone voice – Successful pilot projects often flop because they don’t have widespread support. These projects are usually conducted in isolation with little consultation with other parts of the business. When the time comes to try and extend the project it often encounters substantial resistance. It’s important that key issues such as governance, sponsorship, stakeholder participation, and integration with the organization’s wider business objectives are addressed early.

Robotic process automation certainly has great potential to help insurers heighten their business performance. To succeed, however, I suggest that carriers adopt a strategic and holistic approach to developing a process automation capability. It must address early investigations of the potential of this technology, include representatives of all facets of the business likely to be affected, devise methods for assessing its impact and success, and continue to explore opportunities to enhance and extend robotic automation.

In my next blog I’ll examine how insurers can build effective robotic process automation programs that deliver sustained businesses benefits. Until then, have a look at this link. I think you’ll find it interesting.

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