Demystifying automation in insurance

4 min read

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Demystifying automation in insurance

4 min read

Since the dawn of insurtech, a wide array of technologies appeared in the market with the aim of improving the way insurance businesses operate. After the first chatbot appeared, there was no going back and engineers continued to build more sophisticated technologies using artificial intelligence, machine learning, and natural language processing.

Owing to the relative novelty of insurtech, however, it might be difficult to understand how these technologies relate and how they are linked with the bigger insurance picture. At a macro level, what problem are they trying to solve and are they really the most effective solution? 

So, in this blog, we are going to demystify and explain the automation ecosystem within the insurance context so the big-picture purpose of insurtech is clearer.

Unwrapping the automation ecosystem

In a more unconventional way, we can divide all the insurance practices into two big categories: external and internal.

By ‘external,’ we refer to all the activities that involve communication with insurance’s end users (e.g. customers, policyholders). We are clearly under the Customer Experience umbrella and, as communication is the main activity, we are going to call this area Conversational Realm.

With ‘internal,’ we refer to all the activities aimed to process customer or policyholder requests (e.g. open a claim, renew a policy, etc). As the focus here is the execution of tasks, with a strong emphasis on automation technologies, we are going to name this area Business Process Automation, aimed to improve operational excellence.

Let’s start with these two categories and narrow them down. We put together a view of the automation ecosystem in a chart to help complete the whole puzzle.

spixii-automation-ecosystem

The Conversational Realm

The conversational realm includes all the touchpoints between customers and policyholders or the insurance business.

Traditionally, the communication here was managed through personal face-to-face interactions, and through call centres since the 90s. Among the newest technologies we have:

  • Web live chat, empowering human agents to manage multiple conversations at the same time through a chat interface.
  • Chatbots, employing robots to manage the conversation with policyholders in a completely automated way through a chat interface.
  • Conversational AI platforms, aimed to improve chatbots’ conversational experience by making them better at understanding, processing, and responding to human language.

 

Business Process Automation

Various technologies are employed to achieve operational excellence. Business Process Automation (BPA) is the main force as, by definition, it encompasses methods and software deployed for automating business processes.

Also known as business automation or digital transformation, BPA, according to Wikipedia “is the technology-enabled automation of complex business processes. It can streamline a business for simplicity, achieve digital transformation, increase service quality, improve service delivery or contain costs. It consists of integrating applications, restructuring labor resources, and using software applications throughout the organisation.”

In detail, one or more process workflows are defined. The extension and depth of such workflows of course is up to the organisation. This means that, in addition to small and simple tasks, entire processes can also be automated.

Within insurance, most of the time the goal is to better manage the information journey between a policyholder and the core systems, such as policy or underwriting systems. Such journeys are often clunky and full of inefficiencies that cause high operating costs and hold times whilst lowering customer satisfaction.

The most known technology within BPA is Robotic Process Automation (RPA), employing software robots to execute repeatable and rules-based tasks or processes. Examples of this include an automatic data entry process or automatically processing underwriting data.

 

Bridging gaps between the two

There are new technologies that appeared in the insurance market more recently that are interestingly positioned in the middle of the two areas we defined. The most relevant example is Conversational Process Automation (CPA).

CPA automates conversations and processes: it leverages chatbot technology to better get in touch with insurance customers at scale but also communicates with insurers’ core systems either directly or via mid-automation layers such as RPA.

As an example, through CPA a chatbot can connect with a policy system to retrieve policy details, authenticate a policyholder to allow editing policy details in a conversational way, or integrate with an underwriting system to display instant quotes.

On top of this, CPA allows insurers to easily configure chatbot conversations through no/low-code interfaces, empowering them to create and manage conversational processes themselves.

As part of the conversational realm, CPA can also integrate with some modules of Conversational AI to improve the conversational experience or even to web live chat and CRM systems for a hand-in-hand collaboration with human agents.

Fostering conversation

 

We live in a technological universe in which we are always communicating. And yet we have sacrificed conversation for mere connection. 

- Sherry Turkle

In a world that is transitioning from products to services, communication becomes a competitive advantage. For insurers, it is not enough anymore to enable connection with customers through technology. It is necessary to meticulously design that connection so that it will become a two-way communication rather than a unidirectional information gathering. Customers demand simple and meaningful communication. 

Connection is what companies contend with when they stay in either the conversational realm or in automating processes. The connection must come together with connection to unleash the full potential of automation and have the company working as one synchronous unit instead of disparate silos. The resultant connection, supplemented by conversation, is what cultivates customer satisfaction and business performance, in the long run.

Illustration of robot with light beam

Discover Conversational Process Automation

CPA allows end-to-end processing through chatbots and leverages advanced analytics to continuously improve both the underlying process and the conversation with the end-user.

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