Moving beyond the RPA pilot stage: How P&C insurers can operationalize automation

Transcription

1 AN EXL WHITE PAPER Moving beyond the RPA pilot stage: How P&C insurers can operationalize automation Written by: Sean Allen Vice President. EXL Insurance

2 The P&C insurance industry has tapped robotics process automation (RPA) to increase the accuracy, speed, security, quality and cost efficiency of their operations. A recent survey conducted by EXL and Everest showed that 80% of P&C insurers were piloting or scaling RPA programs. However, many insurers struggle to advance their RPA pilots into full-scale adoption and implementation of RPA. Problems such as a lack of stakeholder buy-in, organizational silos and misalignment with IT teams can prevent a company from expanding its robotics programs. Without a clear, precise strategy, insurers will be unable to move past their initial RPA implementations. Operationalizing RPA requires: Where and how insurers implement RPA Most insurers have seen success implementing RPA in the four main areas. Each present challenges and opportunities: Process Complexity Time required Configurability Benefits First notice of loss New business setup and enrollment Underwriter risk information Underwriter assignment Capacity, fraud detection accuracy and on-the-spot settlement Shortens learning curve and cycle time More accurate and efficient Decreases cycle time, onboarding time and cost-to-serve Fewer errors and peer-to-peer audits More efficient Fewer field-level escalations Better underwriter utilization and firsttime correct assignments Designing a detailed RPA roadmap Instituting clear governance Incremental expansion based on results These steps provide the foundation that insurers need to capitalize on the ability of automation to improve business operations. The current state of RPA: Implementations in silos Insurers often approach RPA in a fragmented manner, with individual teams pursuing pilots to solve their own problems. This can make it difficult to understand where and how RPA has been implemented within an organization. Without central oversight, driving organization-wide adoption is complicated. Teams may seek out their own RPA vendor. Though this may have short-term benefits, it can cause higher costs or unrecognized synergies if the vendor s solutions could be applied to other groups EXLservice.com 2

3 as well. A siloed approach can also prevent groups from sharing insights and best practices. Risk management suffers with a scattershot approach. Each team may implement their pilots with limited involvement from IT, which can lead to poorly documented or unmaintained source codes for the RPA bots. This makes fixing any bugs in an automation program difficult and time consuming, overextending IT and eliminating the benefits of automating the process in the first place. Communication is another area that can suffer with this approach. Buy in suffers if employees are worried about jobs being automated. Create an RPA roadmap To better operationalize RPA pilots, insurers must first create an RPA roadmap that defines the goals, steps and key performance indicators. This shifts the focus from tactical implementations focused on fixing specific problems to a strategic approach with RPA as part of a broader transformation agenda. After identifying what tasks would most benefit from RPA, insurers can begin a measured expansion. Based on this information, executives perform a cost/benefit analysis to identify new areas for RPA or which current pilots should be improved. This includes identifying the complexity of the implementation and developing metrics for success. Organizations can then prioritize RPA projects based on projected ROI, creating a clear roadmap for deployment. After identifying what tasks would most benefit from RPA, insurers can begin a measured expansion. Institute clear governance Successful RPA requires centralized oversight. This maintains focus, whether on the RPA roadmap or a broader transformation agenda. The roadmap charts the end-to-end journey from pilot to production. This begins by assessing the performance of current pilots. These are then analyzed to see who owns the implementation, if the software functions as expected, and what value is created. Clear governance also facilitates better communication. Employees may receive mixed messages from different stakeholders, creating confusion on how RPA would impact or possibly replace their jobs. EXLservice.com 3

4 Governance challenges can be resolved through an RPA Center of Excellence (CoE), a dedicated group for overseeing RPA throughout the business as a whole. The CoE centralizes program management and performance tracking across groups to serve as a single source of truth. A Center of Excellence should include cross-functional representation: Insurer: The insurer manages the CoE. This ensures that its functions align with their goals for scaling up past the pilot stage. Along with IT, most CoEs include process or business leadership among their members, as their boots-on-the-ground experience with how RPA is actually impacting processes is essential. They keep HR looped in on new developments to provide clear communications about what effects the workforce can expect from RPA. Service Provider: The role of the service provider goes beyond embedding RPA into an insurer s current systems. They are also responsible for ensuring processes are lean as possible before integrating robotics to produce the best results from its implementation. In partnership with the insurer, the service provider also creates demos and use cases that demonstrate how RPA can be used across various business lines. Robotics Vendor: Representatives from the robotics vendor provide support as needed for implementing robotics into the current systems. Bringing these three groups together under one roof makes change manageable and can navigate IT challenges involved in scaling RPA pilots. The CoE develops the robots, performs quality assurance and manages talent. The group also documents, and enforces client-specific RPA standards and technical agreements. Doing so makes updating or changing the bots an easy process. The CoE also serves as a knowledge repository of in-house, legacy and third-party systems. This allows the implementation teams to quickly learn the system-level constraints, increasing the speed and sophistication of automation solutions. Expand incrementally Operationalizing RPA requires a clear articulation of value measured against predicted ROI outlined in the roadmap. When targets are reached, RPA can be expanded into the next priority area. EXLservice.com 4

5 Case Study: RPA for FNOL An insurer struggled to reduce high claims costs and average claims handling times, both of which impacted customer satisfaction. EXL deployed its FNOL automation solution enabling automated workflow, intelligent information extraction from multiple sources and judgment-based processing. This involved embedding robotics, analytics and machine learning for exceptions processing. Results included: RPA rollouts should be communicated to employees, especially about if or how new RPA projects could affect their roles in the company, as well as implementation timelines and benefits. This cuts down on the uncertainty and improves buy in. As more processes become automated, the CoE should continually monitor performance. Automated processes can always improve from their initial implementations. By conducting ongoing benefits monitoring and keeping stakeholders up to date, operationalized RPA programs can create value on a continuous basis. Insurers looking to gain a competitive edge must find ways of fitting RPA into a broader transformational agenda. After improving the speed and efficiency of their processes through Lean techniques and automation, organizations must make them smarter using analytics, continuously improving by incorporating machine learning and virtual with cognitive technology and AI. The end goal is an operating model that executes with speed, precision and fluidity. By scaling their RPA pilots, insurers can create a solid foundation for broader digital transformation initiatives % increase in customer satisfaction 20-30% decrease in cost per claim 10-15% increase in early fraud detection Beyond RPA RPA can decrease costs and improve productivity by making processes more rapid, but RPA is now the norm in business process transformation and not the exception. EXLservice.com 5

6 EXL (NASDAQ: EXLS) is a leading operations management and analytics company that designs and enables agile, customer-centric operating models to help clients improve their revenue growth and profitability. Our delivery model provides market-leading business outcomes using EXL s proprietary Business EXLerator Framework, cutting-edge analytics, digital transformation and domain expertise. At EXL, we look deeper to help companies improve global operations, enhance data-driven insights, increase customer satisfaction, and manage risk and compliance. EXL serves the insurance, healthcare, banking and financial services, utilities, travel, transportation and logistics industries. Headquartered in New York, New York, EXL has more than 26,000 professionals in locations throughout the United States, Europe, Asia (primarily India and Philippines), South America, Australia and South Africa ExlService Holdings, Inc. All Rights Reserved. For more information, see us: lookdeeper@exlservice.com On the web: EXLservice.com GLOBAL HEADQUARTERS 280 Park Avenue, 38th Floor, New York, NY T: F: United States United Kingdom Czech Republic Romania Bulgaria India Philippines Colombia South Africa