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Robotic Process Automation or RPA is becoming a major part of insurers’ efforts to reduce costs and improve operational efficiency. Not all processes lend themselves to RPA, however.
I have written previously about Robotic Process Automation (RPA) and its potential impact on insurers. As we gain real-world experience with RPA, we are starting to see the real power of service automation, particularly on the back office operations that underpin so much of the insurance industry.
In their quest to reduce high variable costs – and to increase speed of service and improve overall productivity – insurance organizations have relied upon the “Core Five” transformation levers of Centralization, Relocation, Standardization, Optimization and Digitization. Now, however, the sixth lever of Automation is coming to the fore. Robotic Process Automation is attracting so much attention because of its potential to provide such dramatic benefits; processing costs, for example, can be reduced by as much as 80 percent, and average handling times can be reduced by 40 percent, with fewer full-time equivalent employees needed to complete repetitive tasks.
Insurers implementing RPA solutions are seeing other benefits, as well; for example, they are obtaining greater visibility and auditability of transactions, leading to better control over processes. They are also experiencing higher staff satisfaction as the elimination of monotonous task allows individuals to focus on higher value-added (and more interesting) assignments.
One of the keys to success in RPA, however, is evaluating the automation potential of specific processes. RPA implementations work better when data used is already digital and in electronic form, and when inputs are structured and in standard formats. Similarly, RPA is better suited to rule-based processes than to processes involving a high level of human discretion, and to processes with a low, rather than a high number of exceptions.
Effective automation programs depend on a number of success factors, including vision, leadership and governance. I will discuss these factors in more detail in my next post.