Speed up underwriting and reduce the cost of doing business with automation

There has always been the concern that commercial lines is not a suitable target for automation. The cases are too bespoke, information too varied and too detailed for a standardised system to manage coherently.

Advances in artificial intelligence (AI)-powered intelligent automation mean more and more unstructured data is able to be ingested, managed and used to make policy decisions. There is considerable potential for insurers not just to improve customer experience, but to build in operational efficiencies and drive cost savings.

Ahead of this year’s Commercial Lines Innovation USA, Adrien Cipel, global head of insurance verticals at WorkFusion, explains why carriers need to think more expansively when it comes to the elements of their process that might be ripe for automation.

Why do carriers not use automation as much as they could?
First, they aren’t necessarily using the right tools. Most are currently approaching it with rules-based or robotic process automation (RPA) which works well when it’s dealing with routines, leveraging structured data. But most of the back-office processes for insurers in underwriting are full of judgement work leveraging unstructured data such as emails or documents (loss runs, statements of value, etc).

If you try to automate that with RPA, it’s like attacking an unstructured mountain of data with a spoon—it’s simply not effective.

The second reason is that you need to start with momentum. That means implementing intelligent automation with a platform that already has some of the automation components pre-built, rather than a blank page. With nothing pre-built, you don’t start with any momentum—you’re starting from ground zero and the ability to see any benefit from it is a long way away.

WorkFusion advocates an approach where we offer a ready-built library developed with Chubb which other commercial insurers can now leverage out of the box.

What areas are most ripe for automation today?
Insurers should tackle all the areas that have to deal with unstructured documents and emails. Underwriting policy administration, claims management, new business intake, compliance and so on—these are the areas where there is the most unstructured data to deal with.

When insurers talk about digital transformation, they’re often focusing on the front end. Is this limiting automation’s potential?
Digital transformation is a big part of costs for insurers. If you want to be competitive in the market—and that means price premium competitive—you need an automated, lean back office too. That needs to be as automated as possible, which is why commercial insurers need intelligent automation and not RPA.

Back-end transformation is also vital because it impacts customer experience. Imagine if an insurer can present a perfect user interface on the front end but it still takes weeks to process claims because the back end is so slow. The faster you can answer a broker’s queries, the more business they can put in front of you. Being slower means you exclude yourself from a market that is making decisions quickly.

Who is at the heart of the automation decision-making process?
In the end we’re talking about the insurer’s operating model, so it should start with the person in charge of that. If they fundamentally don’t want to change their processes, then nothing will happen. However, if they do want change, they can become a real force for change and mobilise the right people in their organisation. It has to start with someone with a big ambition.

What would convince an organisation to change?
Imagine your operating model if it stayed still and nothing changed. Will it be valid if this or that happens in the market? Will it be valid if customer expectations suddenly increase, or if everyone suddenly finds they have to work from home?

If the answer to any of these is ‘no’, that’s where the convincer is. When this happens, you will have a sub-optimal operating model, so you need to prepare.

​Legacy technology integrations are always a concern. How do we add new capabilities without overburdening IT or the company’s system as a whole?
Choosing integrated platforms is key, versus gluing on a new system each time there is a new need. Adding in this or that means they all need to be managed and maintained and that can be a nightmare without an integrated platform on top of legacy systems. It will never scale.

On the other hand, if you have an integrated platform with pre-built components, you know your automation journey will start out fast and you will have a platform that is fit for 95 percent of your needs. Then, you can scale five years down the road and if you have to fine-tune, you can add in more capabilities.

Adrien Cipel will be speaking at Intelligent Insurer’s Commercial Lines Innovation USA Virtual Event (May 18 to 20). The event is free to attend for insurers and brokers/agents, but you must register in advance. Sign up to access the content live and on demand here.