In search of increased productivity, the insurance industry is turning to robotization.
A robot works almost like a human being. It performs repetitive activities. It achieves targets. The only thing is – it’s never wrong. Or almost never.
Robotization is gaining momentum wherever we perform tedious and schematic activities. That’s because it saves time and money, increases productivity, brings 24/7 availability, and eliminates errors. Such is our human nature that we spark changes. We like to be progressive and progress is about looking for improvements.
When is the right moment to say "yes" to robotization? It’s all based on the evaluation of profitability, regardless of the environment in which we operate. The Boston Consulting Group analysts have defined the so-called "breakthrough moment". According to the analysts, the speed of robotics development in the world will increase from the current 5% to 25% per year when it is more profitable to buy a robot for 5 years than to hire a man for the same 5 years.
According to EY estimates, process robotization reduces the cost of human operations by 25-50% and provides a return on investment in less than a year. MGI reports indicate that robotization can increase staff productivity by up to 1.4% per year.
Insurers in the know
To insurance companies, robotization is not an unfamiliar concept. In the insurance environment, robots are simply applications used to automate processes in the area of motor insurance, among others.
Robotic Process Automation (RPA) is used by insurers in accounting or debt collection, order processing, data management, creating reports, payment settlement, or reporting. Insurers gradually automate the process of insurance offer selection, renewal or claims registration and verification.
Basic processes in each insurance company are based on collecting data from various sources, creating their collections, analysing and managing them. RPA can collect data in one place and fully automate the data entry process. This supports underwriting and risk assessment.
Insurers can also go one step further by using Optical Character Recognition (OCR) software for character and text recognition in an image file. The robot will enter data from a document, check the text for linguistic correctness or archive the document.
Voice and emotions out of the box
The last months have seen intensive development of automated voice systems. The insurance industry is not lagging behind in this area, focusing on the process of customer contact automation. The callbots receive and make calls while voice hosts accept claims. And we can be sure that these types of robots are here with us to stay. Voicebots will be developed to make conversations in natural language, recognising emotions, adjusting the style of conversation to the mood of the customer.
It is said that today’s algorithms of emotion recognition work more effectively than people. According to Gartner, 85% of company-client interactions can be handled without human intervention.
Robotization is also being developed in the area of insurance sales and premium calculation. The said, voice tools are used for this purpose as well as any tools from the group of loss prevention technologies. Insurers start to contact directly our homes, cars or systems monitoring our health. Customers will more and more often use discounts thanks to "black boxes" installed in their vehicles, or thanks to the systems installed in their homes.
Disturbing pace
According to Gartner's estimates, the value of the global RPA deployment market in 2018 was $849 million, with a forecast of $2.9 billion for 2021. This is one of the fastest growing segments of the software market. In 2021, more than 50% of companies will spend more on robots than on mobile applications annually. This may be a cause for concern.
The famous English astrophysicist Stephen Hawking and his team of scientists have developed a code of 23 principles to protect us from "evil superintelligence”. One of the principles says that super-intelligent machines will be great at achieving their goals, but if these goals are not consistent with ours, we will have a big problem.
Stand-alone, intelligent applications like Google Now, Apple Siri or Alexa are parts of our everyday lives. These are the applications that increasingly "think” for us – and ahead of us. In the next step, will we be threatened with mass layoffs and a robot "more human than human" that questions our existence – as Ridley Scott has presented it in the "Blade Runner"?
Causes before effects
In order for this not to happen, and for the robots to make our lives easier, not harder, we need to develop skills of RPA design and management. Insurance agents, for their part, must evolve into experts and consultants. Robotization will certainly be an impulse to transform the labour market.
What should also be kept in mind when planning development towards robotization is the IT infrastructure. RPA must be integrated into the existing infrastructure. Here we can encounter the problem of outdated, not-so-scalable systems. This is another area that will present new challenges for we humans.
Making use of robotization, let’s remember what the late theoretical physicist Stephen Hawking said: that the fundamental principle governing the universe is that causes occur before effects, never the other way around. Once we remember that, maybe our fears won’t make things look twice as bad as they are.
Author: Aleksandra Wołowska, Senior Business Consultant at Comarch