At DIA Munich 2022 UiPath hosted a round table titled Automation & AI in insurance. Manage the transformational change. At this meeting representatives from both UiPath and senior executives from leading insurance companies discussed key aspects of automation in insurance.
The trend was already visible at the booth of UiPath at DIA 2022: the insurance industry has clearly discovered the value of automation. Going beyond RPA, solutions like AI, Conversation Mining and Document Understanding are adopted more and more in this particular branch of the financial sector.
The theme of this round table is summed up in a telling quote by McKinsey: “The world of work is changing. Artificial intelligence and automation will make this shift as significant as the mechanization in prior generations of agriculture and manufacturing. While some jobs will be lost, and many others created, almost all will change.”
In his introduction Gerrit Knippschild of UiPath discussed the demographic and technological trends that change operating models and workforce. On the one had there is a strong pull at the workforce caused by increasing demographic change, as 2060 the overall workforce in the western European countries will decrease by 20-30%.
On the other hand there is a push because Automation & AI will have a significant positive effect on work demand but it does require a new kind of job profiles. McKinsey is estimating that 45-55% of overall workforce activities can be automated by adapting currently demonstrated automation technologies.
He continues: “We talk with customers on a regular basis about how to successfully scale automation. The current insurance industry faces many disrupting trends. An important limiting factor is the shortage of skilled workers in the market. At the same time large insurance companies like Allianz and Generali are feeling the need to be competitive. As UiPath we are convinced automation can help with that. If, for example, you are in a scenario in which human resources are limited, automation can definitely help.”
His co-host, Julien Bardou from Allianz Technology, adds: “And change is not just about automation. Automation is not the only topic on the agenda of insurance executives. Most insurance companies already have a number of other large IT projects. There is a lot of technology coming in, and this technology changes fast. Still, the real challenge appears to lie in the organisation itself, in the culture of change. A lot of people, even those in middle management, are suspicious about the transformational character of technology. And although it is understandable, you need to embrace it.”
Because ultimately it is not so much about technology, it is about the challenges organisations are facing. “And one of the biggest challenges is that people are scared of change. At the same time there is a ‘grey zone’ of worry about what IT should do and what the business should do. These walls are now slowly breaking, and business more and more has a hand in technology decisions. And tech experts take decisions which affect the business. This means they both should trust each other.”
Insurance is an old industry, which means there is so much legacy. “There are so many traditional processes no one wants to change, because they have always worked. This industry does not start from scratch. Also, insurance is not tangible, it is not a physical product. You have to offer a customer journey, but to do that you have to know intimately what happens in the processes, like the claims department.”
Another major challenge is the shortage of talent. “Where in the past we were mainly looking for technical roles, now we see a large demand for people that can build a bridge between technology and business. We need to break down the silos.”
Diana Kanostrevac, of UiPath customer Generali, adds “I could not agree more. But a topic I want to add is that, although we are organized by line of business, the all-important question is what the customer wants. The customer expectation is to get a 360-view, and the robot needs to support the customer experience end-to-end.”
Another Insurance executive adds a different challenge they have faced: “We once had a myth around agile, which actually turned out to be fragile. We worked on multifunctional teams with all kinds of people. But when we asked people from the business for input they perceived it as a threat. So it is partly about culture, but it is more, it is about human behaviour and then changing this human behaviour. That takes courage, and can be quite challenging.”
The discussion then turns on KPI’s: How can you measure the impact of an IT solution? A complicating factor for one of the people present is the economy: “Our biggest challenge is that we are not in the best economic environment right now. So if you want to implement automation you are also under pressure by the financial results. So this comes down to the way the line of business handles automation in relation to the financial situation.”
One of the other executives recognizes this financial pressure. “You can have a decision to automate, but sometime later on, after financial pressure on the revenue for example, the management is hesitating and wants to stop the project. This is constantly going back and forth. And on top of the transformation we all have our daily KPI’s. So where do you deliver?”
Another participant adds: “You have to realise at this stage we cannot automate everything. If you automate 80 percent in our business you are happy. But automation in insurance is not the same as automation in retail, which is 99 percent automated. As an industry we need to find automation which covers nearly 100 percent of the processes. That will be a big step forward.”
A participant adds a warning: : “But the point in our industry is the human in the loop. That is the biggest challenge. If we automate end-to-end, where now all the people are involved, it is a success. The robot has to support the people, not the people supporting the robot.”
Another executive says: “It is all about the expectation of the customer. We are already ten years behind this expectation in insurance. So we try to identify cases where we can evaluate processes for automation, with the customer in mind.”
Another confirms: “A classic example is an online form, which is completed by a customer, but in the back end is manually copied into the system by an employee. You need to have an ecosystem which gives the customer a retail experience, not a fragmented experience. It is all about the customer in end-to-end automation.”