5 Use Cases of Intelligent Process Automation in Insurance

Overview

Despite providing financial protection and peace of mind, the insurance sector has long been criticized for its slow processing times, susceptibility to human error, and overall inefficiency. However, today’s customers are no longer satisfied with the status quo. They demand speed, accuracy, and personalized service.

Intelligent Process Automation (IPA) helps insurers meet these expectations and address the sector’s long-standing challenges.

IPA combines robotic process automation (RPA) and artificial intelligence (AI) technologies such as natural language processing (NLP), machine learning (ML), and cognitive automation to automate not just repetitive tasks but also those that require cognitive capabilities, decision-making, and human-like reasoning.

With the global IPA market expected to reach $50.7 billion by 2032, insurance companies increasingly leverage this technology to automate complex processes, enhance efficiency, and improve customer satisfaction. Let’s explore the five crucial use cases of IPA in the insurance sector.

1. Claims Processing

Traditionally, claims processing has been cumbersome and time-consuming, fraught with manual interventions from agents to collect documents and verify information. Intelligent process automation transforms this process, enabling end-to-end automation from the initial notification to the final settlement. AI-driven algorithms quickly analyze claim documents, extract relevant information, and accurately assess damages. This allows insurers to swiftly verify claims and automatically route the information through the claims department while keeping customers updated on the claim progress. As a result, customers get their claims resolved faster, and insurers are also able to handle more claims with less hassle.

2. Policy Administration and Servicing

Managing and servicing insurance policies involves a myriad of administrative tasks, including policy updates, renewals, and endorsements. These tasks require significant manual effort and are prone to errors and delays. IPA automates these processes and provides seamless self-service options to policyholders. This means they can make updates themselves without speaking to an agent. AI-powered chatbots and virtual assistants enable insurers to handle customer inquiries and provide real-time assistance 24/7. Moreover, IPA facilitates data-driven decision-making by offering insights into customer behavior, preferences, and satisfaction levels, helping insurers proactively identify opportunities to improve their products and services.

3. Underwriting

Underwriting, the process of assessing risks and determining policy premiums, is a critical function in the insurance industry. However, manual underwriting has suffered multiple setbacks, from lowered decision-making to higher turnaround time. According to an Accenture report, underwriters spend 40% of their time on manual tasks. Using intelligent process automation, insurance firms can harness data analytics and machine learning to automate and optimize the underwriting process. This means they can process vast amounts of information, including demographics, medical records, and historical claims, more precisely and efficiently than human underwriters. This results in faster policy approvals and improved risk selection. Furthermore, IPA enables insurers to personalize underwriting decisions based on individual risk profiles, leading to more competitive pricing and tailored coverage options for policyholders.

4. Fraud Detection and Prevention

McKinsey reports that 5-10% of all insurance claims are fraudulent, costing insurers billions of dollars annually and eroding trust in the industry. Yet, the sector often relied on manual investigations and rule-based systems, which proved time-consuming and ineffective. Intelligent process automation offers a more sophisticated and proactive approach to fraud detection and prevention.

Leveraging advanced analytics and machine learning, IPA enables insurance companies to analyze vast amounts of claims data and identify intricate patterns and anomalies that may indicate fraudulent activity. It helps insurers detect suspicious activities as they occur and take immediate action to mitigate losses. IPA also empowers them to keep up with the evolving fraud trends and tactics by continuously improving fraud detection algorithms. This helps minimize financial losses and safeguard brand reputation.

5. Regulatory Compliance

The insurance industry is heavily regulated, requiring companies to comply with various laws and regulations. Non-compliance can result in heavy penalties, reputational damage, and legal consequences. However, manual control compliance poses a risk of human error. IPA automates compliance reporting and monitoring, enabling insurers to adhere to regulatory requirements without any hassle while minimizing the burden on their compliance teams. According to PwC, businesses can reduce compliance costs by 10% with a 15% increase in automation. AI-powered compliance platforms can interpret complex regulations and generate accurate reports in real time while also proactively identifying potential compliance issues before they escalate into serious problems.

Streamline Your Insurance Operations with Newgen’s Intelligent Process Automation

Newgen’s Intelligent Process Automation platform accelerates your insurance processes by automating repetitive and mundane tasks. The AI-powered, low-code-based platform plays a pivotal role across multiple fronts, from claims processing to underwriting, policy administration, customer service, fraud detection, and compliance.