The insurance industry is rapidly adopting digital technologies to transform legacy processes and keep up with changing customer expectations. According to KPMG, the COVID-19 pandemic has accelerated insurers‘ digital transformation by 3-5 years. The next major wave of transformation will be driven by hyperautomation – combining traditional automation with emerging technologies like artificial intelligence (AI), machine learning (ML), robotic process automation (RPA), and more.
As a data analyst and machine learning specialist with over 10 years of experience in process automation and analytics, I‘ve seen firsthand how hyperautomation can drive efficiency gains and improve customer experience across the insurance value chain. In this post, I‘ll share my perspectives on the top 10 use cases of hyperautomation for insurance companies today.
What is Hyperautomation?
Hyperautomation refers to the orchestrated use of multiple technologies like RPA, AI, ML, process mining, chatbots, etc. to automate business processes end-to-end. As per Gartner, hyperautomation enables rapid scaling of intelligent process automation across the enterprise.
Image source: AIMultiple
Let‘s explore the top 10 use cases of hyperautomation for insurance companies:
1. Underwriting
Efficient underwriting is critical for accurately pricing risks and remaining profitable. However, manual underwriting using legacy systems is often slow and prone to errors.
Hyperautomation can dramatically improve underwriting in the following ways:
Submission Processing
Bots can collect data from customers via webforms, email, etc. Natural language processing (NLP) can extract relevant information from unstructured documents like doctors‘ notes. The bots can then populate company systems with structured data.
For e.g. Lemonade‘s AI bot Jim automates over 50% of customer onboarding.
Risk Assessment
Advanced analytics and ML algorithms can be trained on internal and external data to accurately predict risks. This allows for personalized, customized pricing based on real-time insights.
Metromile‘s AI analyses over 4 billion driving data points daily to offer pay-per-mile insurance.
2. Policy Management
Policy management involves high-volume repetitive tasks like issuing policies, updating details, renewals, cancellations etc.
Bots can automatically process documents, emails, forms and systems to handle various policy transactions like:
- Sending renewal notices
- Adjusting coverage, premiums
- Processing cancellations
- Updating customer data
This provides significant operational efficiencies. According to McKinsey, automation can help insurers reduce policy admin costs by up to 70%.
3. Claims Management
Claims processing is crucial for customer satisfaction and managing costs. AI and automation can transform the claims process:
First Notice of Loss (FNOL)
- Chatbots for 24/7 FNOL intake
- Computer vision to estimate damage from images
- IoT devices like smart homes & cars to provide real-time data
This allows immediate claims notification vs waiting for adjustors. Real-time FNOL via bots can improve customer satisfaction by 10-15%, per BI Intelligence survey.
Claims Assessment
Bots can collect documentation and process claims faster. AI can review documents, estimate damages, validate claims automatically. This reduces leakage and speeds up resolution by over 20%, as per SMA study.
Fraud Detection
AI analyzes claims data to spot false or inflated claims. Computer vision validates damages from images. IoT devices provide real-time telemetry data, preventing fraud. This can reduce fraudulent claims by up to 35%, per FICO analysis.
4. Customer Service
Hyperautomation improves customer experience via:
Personalized Services
Using smart devices data and AI, insurers can offer customized, real-time services like PAYG and P2P insurance. Up to 83% of customers are open to sharing data for personalized pricing, Capgemini found.
Onboarding
Chatbots guide customers through applications. AI extracts data from documents. Bots pre-fill forms and verify ID documents, accelerating onboarding. This can reduce application processing time by over 40%.
Query Handling
24/7 chatbots can address common customer queries and provide policy information quickly vs calling centers. Chatbots can resolve up to 80% of routine inquiries, improving CX and lowering costs.
5. Marketing & Sales
Hyperautomation transforms marketing and sales:
Lead Management
Bots qualify inbound leads by scanning forms, emails etc. AI predicts lead conversion probability so reps can focus on hot leads. This can increase lead conversion rates by up to 25%, per Aberdeen study.
Upsell / Cross-sell
AI analyzes customer data to identify upsell & cross-sell opportunities. Bots can then execute contextual campaigns across channels. Targeted campaigns via bots improve upsell/cross-sell conversions by over 15%.
Chatbots
AI chatbots qualify leads, answer questions, recommend products, and allow purchases 24/7. Chatbots can capture leads at all hours, improving conversions.
6. Compliance
Regulations require screening customers, monitoring changes, generating reports etc.
Bots can automatically:
- Screen names against watchlists
- Monitor regulatory changes
- Create compliance reports
- Identify process risks via process mining
This reduces compliance costs and risks by over 30%, per Deloitte analysis.
7. Finance
Bots can automate high-volume repetitive finance processes:
- Extracting data from invoices and systems
- Invoice processing and reconciliation
- Journal entries
- Reporting (balance sheets etc)
This boosts productivity by over 40% and minimizes errors, according to an EY case study.
8. HR
AI and bots transform HR processes:
- Automate applicant screening and scheduling interviews
- Analyze performance data to identify high performers
- Guide employees through onboarding paperwork
- Address common HR queries 24/7
McKinsey estimates that intelligent automation can save HR departments over 20% in costs.
9. IT Operations
IT automation use cases:
- Bots monitoring systems, auto-scaling cloud resources
- Virtual agent handling password resets, software issues
- Automated patch management
- AI analyzing logs, alerting on anomalies
This reduces costs by over 30% and improves resilience as per Gartner.
10. Business Continuity
In case of disasters, bots enable business continuity by:
- Rerouting calls, emails, chats to work from home agents
- Granting secure remote access to systems
- Spinning up cloud resources to handle traffic spikes
- Proactively warning customers of service impacts
Automation allows insurers to maintain close to 100% uptime even during disruptions, improving customer confidence.
Let‘s see how leading insurers are using hyperautomation:
Root Insurance
Root uses AI, IoT data from phones to provide personalized premiums based on driving behavior. This enables customized pricing and improves underwriting accuracy.
Lemonade
Lemonade‘s chatbot Maya provides 24/7 customer support. Jim, the underwriting bot, handles much of policy purchase and claims processing. This transforms customer experience.
Metromile
Using IoT devices, Metromile tracks mileage to offer pay-per-mile insurance. Machine learning gives personalized quotes based on driving patterns.
Pacific Life
Pacific Life uses AI for document processing and chatbots to improve new business applications and maximize straight-through processing.
John Hancock
John Hancock uses a variety of automation technologies like virtual agents, speech analytics, chatbots etc. to boost operational efficiency across various processes.
Hyperautomation is gaining rapid traction across the insurance industry, driven by the need for increased efficiency, superior customer experience and lowering costs.
According to Gartner, by 2024 organizations adopting hyperautomation will deliver business processes at least 25% faster than competitors. AI and automation will be embedded into all key processes within the next 2-5 years.
As legacy systems limit insurers‘ agility, modernizing IT infrastructure and integrating siloed applications will be critical to scale automation initiatives. Companies also need to maintain the human touch by combining bots and human workers via attended automation models.
With real world benefits demonstrated by early adopters, hyperautomation is poised to transform insurance and unlock significant competitive advantage over the next few years.