The 0.0 to 4.0 Journey: Evolution of Insurance Automation

For decades, insurance ran on three things, including paper, patience, and pure human efforts.

A new policy application would be about 20 pages to fill out by hand, then mailed in, then manually entered by someone paid to type all day. Processing a claim meant weeks of phone tag between agents, adjusters, and unhappy customers. Errors were common, often requiring time-consuming corrections. This was Level 0 Automation, a world where:

• PROCESS meant passing physical folders between departments
• EFFICIENCY meant hoping the fax machine didn’t jam
• CUSTOMER SERVICE meant apologizing for delays

Then came the rude awakening.

When insurers finally tallied the cost of manual work, the reprocessing, the lost customers, the fraud that slipped through, they realized efficiency wasn’t just low; it was costing them deals. That’s when insurers took their first step towards automation, which was called Level 1 of automation:

• Spreadsheets replaced ledger books, clear indication of progress
• Basic bots extracted data from scanned forms, which meant fewer typos
• Rules engines auto-approved simple claims, which clearly signified speed

But, the relief was brief, too brief. Insurance leaders automated the paper, not the problem. They thought automation would solve everything, until they realized claims were stuck in endless loops, approvals waiting on lost documents, and customers walking away. Bots helped, but siloed systems, and manual handoffs kept dragging efficiency down.

Then Came Level 2

No more half-measures. A Capgemini report found legacy systems blocked data integration for 71% of insurers, proving basic automation falls short and demanding advanced, integrated solutions.

RPA-driven orchestration took over and resulted in:

• Straight-through processing, standard cases flew through untouched
• No more chasing departments, workflow engines did the routing
• Faster processing cycle time, and all happy customers
• Free knowledge workers to tackle the complex stuff, not paperwork

Assistance was a start. Orchestration was the real fix.

The Leap to Level 3: When Automation Needed Intelligence

Level 2 orchestrated workflows, but still left humans holding the bag. Claims stalled for approvals. Underwriting crawled with reviews. Meanwhile, customers started expecting answers now, not next week.

The reality check?

• 54% of insurers were drowning in unusable data (Capgemini)
• 51% remained chained to legacy tech
• RPA hit its limits, great for rules, useless for judgment

Level 3 Changed the Game: AI That Decides

This is where level 3 introduced not just intelligence, but agentic AI systems that think, act, and adapt.

• Kill fraud faster, predictive models flagged scams before the payout
• Process anything end-to-end, from complex claims to niche underwriting, zero human handoffs
• Respond in real time, AI assessed risk while the customer waited
• Personalize every interaction, systems adapted to behavior, not just rules

The End of Blind Spots: How AI is Transforming Insurance

Reality Behind the Automation Curve

The industry has advanced towards Level 3 automation, critical processes and workflows still remain stuck at level 0-2 because of regulatory hurdles, a mix of tradition, and operational inertia. These stubborn pockets of manual work, basic tools, or partial automation lead to inefficiencies, and present a key opportunity for IT leaders to drive the real transformation.

By identifying high-impact areas, piloting scalable solutions, such as RPA or AI, and driving change management, they can break this inertia, modernize operations, and unlock significant productivity gains while ensuring compliance. The key lies in starting small, demonstrating quick wins, and gradually scaling automation to bridge the gap between legacy systems and next-gen efficiency.

According to a study, claims associates spent up to 80% more time on data entry compared to automated processes and error rates in manual assessments range from 7% to 12%, posing big financial risks for insurers. Source: Decerto

Hidden Opportunities in Insurance

It’s time to address these challenges and look behind the curtain. 57% of organizations ranked AI as their top strategic technology for achieving three-year goals.

Reaching Level 3 isn’t a straight path. It’s dynamic, and for many leaders, remains an ongoing pursuit.

Frictionless Insurance, Zero Blind Spots: The Level 4 Breakthrough

The endgame isn’t just faster processes, it’s insurance that anticipates instead of reacts. It’s like having:

• A policy that adjusts your coverage and premium in real-time as you renovate your home
• A claims system that dispatches a repair crew before you notice the water leak
• Underwriting models that price emerging climate risks before the first storm forms

This is Level 4, where agentic AI transitions insurance from a service to an always-on safety net.

Witness the Newgen Difference for Zero Blind Spots.

We, at Newgen, are leading this evolution by bringing AI-first narratives into every stage of the insurance journey and enabling a future defined by expanded possibilities, streamlined operations, and intelligent decision-making. With NewgenONE, insurers can expect Zero blind spots, irrespective of the personas and functions they are a part of.