In the early 14th century, a Franciscan friar was so adept at shaving issues away from complex problems to find simple solutions that they named an interesting law after him: Occam’s razor. The law named after William of Ockham is the principle that more often than not, a simple solution—not a complex solution—is the correct one.
Insurance systems today are known for their complexity, with multiple core systems connected to ancillary systems via inadequate and expensive-to-maintain integrations. On top of that, processes at many insurers include workarounds and use of manual calculations at all levels of the customer journey and policy life cycle. Repetitive tasks like data entry and copying/pasting information between systems are unfortunately still relatively common. While many insurers have addressed core system transformation, it’s still considered painful, expensive…and necessary.
Enter our 14th-century friend William. Is transforming your core systems too expensive? Are multiple systems and integrations too hard to maintain? Slice away the complexity and what needs to be done? Many insurers are finding that the use of robotic process automation (RPA) is a simple way to address current needs while delaying the inevitable difficulties of core system transformation.
In Novarica’s recent report on emerging technology, we noted a large increase in RPA use, especially at life carriers, where more than 60% have deployed the technology in a pilot program or are considering a pilot. Insurers, especially large insurers, are using RPA to automate tasks and free up knowledge workers to perform higher value tasks. Property/casualty carriers are using RPA for underwriting and claims, while life carriers are mostly using RPA for customer service. Insurers are using the relatively simple solution of RPA as a razor to cut away inefficiency and sharpen up integrations.
Solution providers have responded to insurers’ needs, from IT services vendors to horizontal RPA providers. RPA provider UIPath just announced a $568M round of funding, and rival Automation Anywhere received $550M last year. As these and other vendors build solutions for insurance-specific use cases, insurers will continue to use this simple solution as the correct one for current complex issues. The need to replace core systems isn’t likely to go away, but RPA has value for helping insurers more simply address short-term problems while applying resources to long-term projects like complex core transformation.
For more information, see Novarica’s report RPA in Insurance: Overview and Prominent Providers, or contact me at [email protected].
Add new comment