Finance proves to be is a fertile ground for successful RPA-projects, as is illustrated by South African insurance company Santam. In their RPA-journey they managed to save 20.000 dollar each quarter and improve productivity eight times, freeing employees time to improve customer experience.
Santam began its automation journey in the middle of 2019. In less than six months, it had automated process across its large and complex business structure. Working with UiPath, Santam has deployed robotic process automation (RPA) at a company level and has already achieved many benefits while laying the foundation to transform its operations.
General insurance has a major role to play in the economic transformation of South Africa and across the continent. Santam has been hugely successful at proactively mitigating the risk factors that inhibit business growth and resilience for its customers. In 2019, the company’s business grew by 7% to $1.8 billion and was named the Sunday Times ‘Top Business Insurer.’ Santam sees technology as an enabler and driver of innovation and efficiency. Its strategy is to create ‘digital ecosystems’ that optimize processes to deliver an end-to-end experience of its services and products.
In many ways Santam is an ideal organization for automation. It’s comprised of several business groups including Santam Commercial and Personal, Santam Specialist, MiWay, and Santam RE (Reinsurance). Automation offered the potential to not only remove a great deal of mundane work but also to begin to optimize processes to improve operational efficiency and service excellence across the group. For example, the company has been able to centralize the financial processes across the 17 separate business units within Santam Specialist.
“I’ve been in process improvement for 12 years and I haven’t before seen a business case like there is for automation”, days Leon Swanepoel, Manager: Business Process Optimization at Santam.
The Santam team quickly understood that the challenge for its automation program was to automate as many of its processes as possible and, where it makes sense, to reuse automations from one area where there are similar processes in other business units.
The solution was to create an RPA program around a central center of excellence (CoE), with three separate CoEs supporting specific business units. The central CoE holds the group-wide license for all UiPath RPA software and is responsible for strategy and governance as well as the roll out of automations into production.
It soon became clear that the speed, cost, and quality benefits of automation reuse were not the only advantage of this approach.
Swanepoel: “By having separate CoEs with a centralized capability, we are able to set up several ‘proof of concepts’ in each of our business units for different automations or new automation technologies. We’re able to share the learning and see where there’s the most potential across the business.”
Finance was the first area to benefit from automation within Santam. Many processes within finance were heavily manual and repetitive with human error being time consuming and costly to correct. It was the ideal area to show the power of RPA to both improve the process and help employees to become more productive. Although centrally controlled, each business unit was responsible for developing their own finance automation.
One of the first processes automated within Santam RE demonstrates the benefits that the company could expect to see from automation. It involved loading invoices from reinsurers onto the Santam platform. The repetitive process took a skilled technical finance clerk 160 hours to process 250 accounts per month. The automation has proven an eight-time gain in productivity, processing 272 accounts in 22 hours.
Similar results have been achieved in other areas of the group. An excellent example is the way that Santam Specialist, a business that offers insurance cover for large infrastructure projects, has been able to transform its financial month end through RPA. It automated four key processes—downloading reports, reconciling data, updating report templates, and uploading the final reports—that had previously been manually executed by time-consuming manual user actions across different processes and systems.
In summary, Santam Specialist has been able to automate as much as 90% of many processes, with employee involvement only required where there’s checking, approval, or decisions to be taken.
Complex business environment
The early automations within the finance function showed exactly how powerful RPA could be for Santam. However, the business structure within each separate unit was highly complex as Johan Troskie, IT Project Manager at Santam Specialist, explains:
“Within the Specialist unit, we have 17 separate businesses. That’s 17 different Accounts Payable divisions with 17 different accounts teams and 17 sets of systems. That’s a great deal of duplication of effort and opportunity for error. It shows you the opportunity for automation to centralize the processes but also highlights the scale of our challenge.”
At the same time as automating its processes, Santam Specialist redesigned them to ensure they are as standardized as possible. The result is automated processes that are significantly faster to execute and more efficient. The business unit estimated that it has been able to save over $20,000 (330,000 Rand) per quarter. More importantly, it has freed up over 120 hours per months at the company’s busiest time. This has allowed the unit to better serve its customer needs by allowing staff to spend more time on higher-value activities and service the growing demand without increasing headcount.
This type of reuse is the goal for Santam with each business unit seeking to roll-out automations across their own processes while also making these automations available centrally where they can begin to be deployed across the group.
Automating core insurance processes
The success of automation within the finance function has shown Santam the potential for automation. In fact, the company acknowledges it has only scratched the surface of how automation can help to enhance processes and enable a move towards a centralized structure that optimizes productivity and performance while minimizing duplication and waste.
However, Swanepoel believes that the greatest potential of automation lies ahead: “The real benefit for us is when we start to automate our core insurance processes to enable ‘straight through processing’ and execute selected transactions which fulfill customer requests without any human interaction. That’s when we’ll definitely move the needle on productivity and customer experience.”
Towards that goal, the company is already combining RPA with its Merlynn artificial intelligence (AI)-driven decision-making platform. Merlynn uses deep learning algorithms to make expert decisions in areas such as claims and underwriting that are consistent with the human decision maker. The company is now working on intelligent automations that will enable complete end-to-end processing.
An example of the type of cognitive automation the company is developing is within the quality assurance (QA) function of policy administration. Handled manually, the company can struggle to complete the QA assessment for 3,000 policies per month. The intelligent automation—where RPA gathers all policy related data and passes to Merlynn to check the quality from an underwriting perspective—can handle 1,000 policies per day. The company is currently testing two robots to double the daily capacity.
Read more about automation in insurance here
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