[Guest Blog] 6 Ways Automation Will Change the Insurance Industry

6 Ways Automation Will Change the Insurance Industry
Terri Williams, Technology Advice

This blog post was written by Terri Williams. Terri is a freelance writer and contributor to TechnologyAdvice who covers technology, business, and higher education topics.


For companies that want to capitalize on customer engagement while streamlining operations, automation is crucial. Automation is changing every aspect of business and that includes the insurance industry. Here are a few of the effects we can expect to see.  

1. The Ability to Maximize Customers

Consumers have become more accustomed to conducting business at the speed of light, and selecting insurance is no exception. Automation allows insurance companies to provide information online, and allows consumers to complete applications in a relatively short period of time.  

In the past, it might take days or even weeks for customers to go through the process of viewing available policies, obtaining a quote, completing an application, and having the application processed.

But automation allows companies to slash this time from several days to just a matter of minutes. Companies are also able to process insurance claims in a more timely and efficient manner while reducing the probability of errors. And this, in turn, leads to more satisfied customers. In addition, real-time analytics allow companies to determine which campaigns are working and which need to be tweaked or overhauled. Finally, automation makes it easy to track leads and conversions.

2. A More Personalized Approach

While it seems that automation would lead to a more generic one-size-fits-all approach to insurance, it turns out that the opposite is true. Consumers now have the option of managing their insurance online via desktop, smartphone or tablet, reviewing their policies, and even making payments online at their convenience.  

Meanwhile, companies can set alerts to notify them when a customer’s payment is late, or even to notify them to contact a customer to wish them happy birthday or celebrate other types of milestones. Also, with customer information readily available, companies can easily view snapshots of their customers and determine which additional products to pitch instead of bombarding them with irrelevant products.

3. Effectively Ensure Compliance

Regulatory statutes can change from year to year and companies that are not in compliance are subject to fines in addition to public backlash and departing customers. Furthermore, when compliance issues do arise, it’s critical to have a solid “paper trail” detailing interactions and processes to back up or battle assumptions. Using automation, every record is meticulously kept and automatically updated through a customer’s life cycle.

This reduces ambiguity and possible misunderstandings. Also, sorting data and creating the necessary reports are a breeze with a fully-automated system that can be changed to reflect new regulations.

4. Efficiently Manage Commissions

Managing commissions can be a tedious process. In addition to the time-consuming process of manually inputting and processing statements, this process is riddled with errors since physical documents can be misplaced. However, automation can allow companies to easily store and access records, determine rates, and pay agents in a timely manner. Automation can also help companies analyze commissions to determine effectiveness.

5. Rethinking Jobs

By 2025, a full 25 percent of the full-time occupations in the insurance industry may be phased out as a result of automation. For example, operations currently make up 46 percent of an average insurance company’s workforce, but by 2025, that number is forecast to drop to 33 percent. Administrative support is roughly 18 percent of the company’s workforce, and that number is projected to drop to 10 percent by 2025.

How is automation reducing the number of jobs? Consider the example of Fukoku Mutual Life Insurance, a Japanese company, that is using IBM Watson Explorer to do the job of 34 human insurance claim workers. While it will cost the company $1.7 million to install the system, and $128,000 yearly in maintenance costs, Fukoku Mutual believes that it will save $1.1 million each year in salaries.

Since companies will need fewer workers in operations and administrative positions, they may want to think about ways to retrain these members of the workforce into jobs of the future using eLearning tools and other HR software. Those areas where a human touch remains important should be kept top of mind, while data-centric jobs are also predicted to rise in importance.   

6. Lower Costs

Many consumers are flocking to online insurance companies because, by cutting out the middleman, they’re able to offer insurance at a lower price. Companies that fail to automate their systems — or that do, but fail to pass these savings on to consumers, will find themselves losing customers.  

When you look at job statistics like those above, or even try to get a comprehensive view of all the new software tools on the market, automation can seem like somewhat of an overwhelming trend. However, the positives far outweigh the discomfort we may have with change. As automation continues to move into the insurance industry, we’ll see customers more satisfied with their experiences and employees more engaged with less tedious work. The insurance companies who grow during this period of change will be those who embrace automation and look ahead to be proactive about coming trends.


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By Terri Williams on December 21, 2017 in Technology

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