With driverless cars, drones and mobile response RVs during natural disasters, insurance is at the center of a technology renaissance that will fundamentally change how we do business, and what our workforce looks like.
For years, we've heard familiar criticism insurance needs to modernize. In fact, a survey of industry delegates at Xchanging's London Market Conference last fall reinforced this perception. Insurers must continue to modernize in order to remain competitive and deliver customer value.
Maybe no other development signifies the insurance industry's commitment to modernize than its adoption of automation, where insurance actually leads over other global industries. But with this will come significant changes to insurers' (and their partners') organizations, from the tasks they assign to current employees to the skill sets recruiters search for.
Three common questions arise when companies consider automating:
Automation really doesn't involve robots, but it does involve assessing which processes can be executed through robotic software. (Photo: iStock)
1. What exactly does automation look like?
The kind of automation we're talking about doesn't involve robotic units roaming about an office floor. It's much more subtle, behind-the-scenes process automation.
Basically, this means wiring repeatable, time-consuming tasks (such as those currently handled by claims adjusters) through robotic software (a concept called "robotic process automation" or RPA), which can handle a massive amount of transactions in a fraction of the time.
The benefits of process automation are tangible. Early adopters can significantly lower operating costs (between 20% and 40% in some cases), improve service quality, increase compliance (automation provides a traceable history of activity), and decrease delivery time.
Within the claims process, there are a number of activities that can be processed with a degree of automation. (Photo: iStock)
2. How do we get started?
You can't just plug-and-play process automation.
In order to truly maximize its effectiveness, companies need to consider how to identify and reorganize processes with automation in mind, and how to encourage employee buy-in and enthusiasm. Process automation is people-powered. It isn't owned by an IT department, and operational staff have an important role to play.
The first step is identifying candidate high-volume processes (think again: claims processing and policy administration). Once identified, these processes need to be reengineered to fit automation into the organizational chart. This can be a time- and labor-intensive process, and often companies turn to experienced services providers, with the time and resources to create a roadmap for automation.
In this step, it's essential to involve operational teams. For example, if a company is automating a claims process, let's say closing outdated claims, the adjusters who typically handle the transaction should help design the automated process with the IT team. This brings adjusters up the value chain they're now involved in strategy and encourages ownership in the project.
Successfully launching automation also means cultivating a company culture accepting of "robot colleagues." One company's experience in the London market was successful thanks to organized "robot councils" introduced before launching. These councils toured offices and clearly communicated the project's goals and how employees would move into expanded roles.
In the end, it's all about institutionalizing automation as a key cog in the business. It's not a shiny toy or something to be feared. It's a key driver of success and enables human employees to be more effective and efficient.
The right automation can save time and use personnel more effectively. (Photo: iStock)
3. What does this mean for humans?
In case you haven't heard, the insurance industry is facing a looming talent gap (with as much as 25% of the workforce retiring by 2018).
But, make no mistake, the type of automation discussed here isn't a cure-all. After all, the software taking over much of the behind-the-scenes data processing and transacting must still be orchestrated by humans it's only as intelligent as we teach it to be.
It does, however, illustrate companies' commitment to giving human employees a more involved, strategic role an attractive characteristic for prospective employees and recent graduates. Process automation isn't designed to eliminate jobs, but rather allow existing employees to move into more fulfilling roles. For instance, when Xchanging automated its claims processes for the London market, adjusters moved from data processing to client strategy. It also introduces a high-tech element into a once paper-based job (one of the most sought-after attributes when you ask millennials what they look for in a company).
Automation will also affect how and where recruiters look for talent, and even coursework at the college level. The shift in entry-level insurance jobs to more strategic roles will require more industry-specific training, making students who graduate with a concentration in insurance or risk management an attractive commodity. Analytical skills and a background in statistics will also be at the top of recruiters' wish lists.
In short, implementing automation isn't as simple as flipping a switch. Ensuring a successful integration requires multiple stages of planning and, most importantly, engaging in a meaningful dialogue with employees.
Sean Allen is vice president, business process services in North America for Xchanging, a CSC Company.
Learn more about automating systems at America's Claims Event in Minneapolis, Minn., June 22-24.
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