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In part one of our blog, we discussed intelligent automation and its practical applications in the insurance lifecycle. Part two deals with the key challenges insurers face when trying to introduce new technology into their business, expected ROI and business outcomes.
Intelligent automation is playing a crucial role in disrupting the insurance industry, simplifying business processes, rewriting the rules of data analytics and enhancing the customer experience. However, some insurers are struggling to deal with the challenges the introduction of new technologies brings. External factors such as ensuring the technology complies with already burdensome regulations add to the internal pressure of transforming traditional business models to remain competitive in a crowded market.
So, what are the key challenges when implementing intelligent automation?
Deciding which intelligent automation technology will bring the most benefits
Intelligent automation offers a swathe of benefits, but it can be difficult to identify the right technology for a business. Start by carrying out an IT audit to confirm current technological capabilities. Then put together a business case which defines what it needs. Customer expectations should be taken into account as much as cost optimisation. Ultimately, a business will need to make a judgement on how much of an edge the technology will give it over its competitors.
Unpicking current technology and processes
Insurance is notoriously process driven, so making changes in one area can often impact several others. Mapping out current processes and technologies will help identify where intelligent automation can benefit a business. An all or nothing approach isn't required, often adapting and adding to existing systems will improve the customer journey and reduce inefficiencies just as well as replacing them.
Old school resistance
Some insurers may take an ‘if it ain't broke why fix it' approach and resist introducing technology they are not familiar with. Alternatively, previous attempts at introducing technology may not have been successful, or ROI wasn't as much as a vendor initially suggested.
Resisting change in the current climate of increasing customer demands and an innovative digital landscape will harm an organisation's growth opportunities.
The cost of investment
Rather than asking whether an organisation can afford to invest in new technologies, a more pertinent question may be whether it can afford not to. Competitors may be investing in technology that enables them to heighten customer satisfaction. Be it a more competitive pricing strategy, 24/7 customer assistance or an expedited claims process.
If an organisation doesn’t provide a comparative service, it may find the missed opportunities outweigh the savings on the balance sheet.
Return on Investment
There are many variables to take into account when calculating the return on investment in technology. Increases in revenue, for example, from increased sales or a more accurate pricing structure. Cost reductions from streamlined business processes and cost avoidance if a cost can be eliminated entirely, by, for example, lowering the number of customer service queries. A reduction in capital expenses from needing less data storage or servers. And capital avoidance if the technology helped get rid of a capital expense.
It's also important to consider non-quantifiable benefits such as customer satisfaction and an improved customer journey as well as measurable gains. Any value added that could be attributed to new technology will help justify the investment.
Broader business outcomes for introducing intelligent automation into a business revolve around cost reductions or increasing revenue. For insurance companies, this is evidenced by:
• Improved customer acquisition and retention rates from customer segmentation and targeted sales campaigns
• Increased customer loyalty because of improved processes, personalisation and behavioural premium pricing
• Enhanced customer satisfaction because of faster claims settlements
• Cost savings from a reduction in fraudulent claims
• Synchronised workforce and systems resulting in increased productivity
With smart strategic planning, insurers can capitalise on the advantages intelligent automation brings. Investment in technology that reduces costs improves productivity and provides an exemplary journey for customers will keep insurers competitive and revolutionise the way they do business.