CLAIMING THE FULL BENEFITS OF INTELLIGENT AUTOMATION IN

CLAIMING THE FULL BENEFITS OF INTELLIGENT AUTOMATION IN INSURANCEA new vision for intelligent automation and artificial intelligence in a turbulent economy

BluePrism.com

The traditional narrative around automation within the insurance sector has been

one of streamlining inefficient and unwieldy processes to drive cost reduction. Over

the past five years, many insurance firms have deployed robotic process automation

(RPA) technology to execute work from the front to the back office across the

organization, from HR and accounts to contact centers and field sales.

In an industry such as insurance, where many firms are dealing with unwieldy and complex legacy systems, structures and processes, there has been a great deal of value to derive from RPA.

However, many firms are realizing that there is a limit to the value that this traditional approach to automation, focused largely on cost reduction, can deliver. There are only so many inefficient processes that can be streamlined.

Instead, forward thinking firms are shifting their thinking and ambition around automation, away from the tactical deployment associated with RPA, to a more strategic approach, which places automation and the digital workforce at the heart of their digital transformation and growth strategies.

Innovative firms are increasingly deploying intelligent automation (IA), which combines RPA with artificial intelligence (AI) functionality, and additional capabilities such as natural language processing, to automate a far wider range of workplace processes, to deliver enhanced levels of customer experience and to exploit opportunities that they simply wouldn’t be able to pursue with RPA alone.

In doing so, insurance firms are moving through the three waves of automation adoption. The first wave of automation is primarily focused on generating cost efficiencies and time savings. But by integrating AI, insurers are now progressing to the second wave, where IA and digital labor drive improved business performance; and the third wave, where the IA platform delivers genuine business transformation.

The Blurring of Intelligent Automation, Digital Transformation and Channel Shifts

IA is now being deployed by a number of insurance firms to enable and accelerate the shift from traditional (and costly) communication channels such as voice and face-to-face interaction, to digital-driven channels such as chatbots and digital self-serve, executing work from Interactive Voice Response (IVR) telephony.

This change, which forms a key element of many digital transformation strategies within the insurance sector, is critical to delivering faster, more seamless and intuitive customer experiences within an ever more competitive industry, where margins are being squeezed from all sides.

In this way, we are now seeing a blurring of the lines between digital transformation and IA strategies. Insurance firms are finding it more difficult to achieve their transformation and digitization objectives at speed without the deployment of an intelligent digital workforce.

Whereas previously many digital transformation programs were held up or fell short due to a lack of available skills and resources, and difficulties untangling and migrating legacy systems, IA platforms can get around these challenges. Organizations can modernize their applications without having to overhaul their entire infrastructure (the traditional ‘rip-and-replace’ approach) and avoid hugely expensive and lengthy integration projects, which rarely deliver on promises. Digital

2 | BluePrism.com

Claiming the Full Benefit of Intelligent Automation in Insurance

labor simply acts as this integration layer, which, up until now, has been a drain on staff resources and a huge barrier to innovation and change.

This blurring of IA and digital transformation is now becoming extremely powerful across all areas of the business. IA platforms, embedded with multi-channel capabilities from day one can deliver on digital strategies and become the principal driver of digital customer experience, intelligent customer journeys, risk and fraud prevention, and regulatory compliance. IA becomes central to innovation goals and future growth and a true differentiator in a crowded market.

The COVID Effect: The Widening Gap in Intelligent Automation Deployment

The COVID-19 pandemic has accentuated the differences between insurance providers that had already begun their automation journeys prior to lockdown and those that were still deploying traditional resourcing and operating models and are now faced with restrictions on the movement of people.

In particular, organizations that had already integrated a fully agile and scalable cloud-based IA platform within their operations have been able to dial up their use of intelligent digital labor during the pandemic to meet fluctuations in demand and drastically changed working practices.

COVID-19 has undoubtedly tested organizational resilience and agility in a way that was unimaginable at the start of 2020. Most insurance providers have had to transform their operating models and go-to-market strategies within days and transition to an entirely remote workforce almost overnight. All this while ensuring their workforce has access to the support, technology and training to be comfortable and productive working from home.

Within the insurance sector, there has been a massive acceleration toward digital channels and automation among firms that were able to scale up their use of a digital workforce. These providers have been able to better manage changes in demand and workload, using digital workers to fill resourcing gaps and meet the fluctuations and spikes in demand that all businesses have seen during the pandemic. An augmented workforce, where humans and digital workers collaborate, can ensure that service levels are continually met, whatever the situation, and variances in workload are managed across multiple business units within an organization.

Unfortunately, firms that didn’t already have access to a cloud-based IA platform have struggled to react with speed and agility. Many firms recognize that they’ve been too slow to digitize their services, including policy quotes, underwriting, and claims processing, in particular. Others have reassessed their global delivery models, in cases where outsourcing and offshoring have failed to stand up against this type of risk. These established models within the insurance sector have, in some cases, proved to be very fragile in the face of a global pandemic.

BluePrism.com | 3

Claiming the Full Benefits of Intelligent Automation in Insurance

the customer by engaging with identity verification technology, understand and interpret the specific customer request and then execute on that request. Web forms within self-service customer portals are proving equally effective. The mid-term adjustment could be a change of address notification, the addition of a vehicle to a car insurance policy or a new medical condition within a health insurance policy. In each instance, human intervention can be bypassed.

The results are positive for all stakeholders. The provider offers a seamless and integrated service with complete compliance and governance around the transaction, while the customer receives a faster, more engaging experience.

Optimizing Fraud Detection and Reduction

Alongside customer experience, some insurance firms are also using digital labor to optimize fraud management across the customer lifecycle, from quotes and underwriting to claims.

An example of this is an insurance provider that operates in a heavily regulated area, where most policies are secured through aggregators and online pricing services. Using a cloud-based IA platform, the firm is able to monitor and examine any variation in data that customers put into a quote system when they are searching for a policy. For instance, if an individual is inputting different mileages into a quote system trying to yield a more favorable quote, digital workers can identify this potentially fraudulent behavior in real time and flag it for human colleagues to investigate. Other examples include changing information in the system related to where the vehicle in question is going to be kept or how it’s going to be used.

In some cases, this has had severe implications for service levels and customers facing long claim processing times. Providers that are behind the curve face significant challenges, not only in how they manage their business operations internally but in coping with a new level of competition in the external market.

The competitive advantage enjoyed by insurers that are deploying IA will undoubtedly be emphasized over the coming months with an expected rise in fraudulent claims due to uncertainty and financial hardship. As you will see later in this report, IA will play a critical role in minimizing fraud risks and optimizing the settlement process for both insurers and customers.

Enhancing Customer Experience

There are a broad range of areas where this new level of automation—where AI is integrated into the delivery of process automation—is being deployed within the insurance sector, across both wholesale and retail insurance.

One such example is the introduction of digital workers to handle mid-term policy adjustments. A number of firms are using digital labor to engage with and serve customers across a number of touchpoints. Digital chatbots are now able to identify

Staff have had to immediately adapt to an entirely new way of working, communicating and managing, while at the same time having to deal with heightened levels of anxiety and uncertainty and, for some, leave due to sickness.


4 | BluePrism.com

Using digital workers to manage these activities will have a huge impact on potential fraud, thereby minimizing risk for insurance providers. Indeed, if fraudulent data is entered into a policy at the point of purchase, it can completely negate the value of the policy, resulting in insurers becoming liable for third-party costs at the point of claim to due to falsified data.

Driving Data Accuracy and Compliance

IA also has a potentially huge role to play in enabling insurers to collect and maintain accurate data across all areas of their business and, in doing so, meeting their compliance obligations.

Inputting accurate data throughout each stage of the customer journey can have a huge impact on efficiency, customer experience and profitability. And there is a huge amount of data involved, from the quoting and underwriting to the policy issues, claims, settlements and renewals.

Speeding Up Claims Management

Arguably, the most exciting developments in the use of IA and AI within retail insurance are taking place in relation to claims processing. An increase in the deployment of digital labor across all areas of claims—from registering of new claims to handling and management and settlement of funds—was evident before COVID-19, but there has been a significant acceleration as a result of the pandemic.

Many insurance providers have placed an ongoing enterprise-wide focus on optimizing claims management, to deliver faster settlements and reduce fraud. In doing so, firms can reduce their costs, deliver improved customer experience and minimize risk.

Automated claim support is one area where IA can deliver in this way. For example, automobile insurance providers are rolling out electronic first notice of loss (eFNOL) capabilities, meaning that customers can start a claim through an application on a mobile phone or handheld device in real time. This means that following a road accident, a driver at the side of the road can immediately start a claim through an app and take photographs of the accident and the damage and position of any vehicles involved to support the claim. This frictionless process saves providers and customers significant amounts of time and energy.

At the same time, the insurance provider can make use of integrated AI capabilities within the IA platform to analyze photographic evidence. AI can be used to check that the vehicle is as described prior to the accident and detect any modifications to the vehicle that might invalidate the policy. It can also help providers ensure the photographic evidence aligns with the events as described in the details of the claim, evaluating any impact damage to vehicles or other positional discrepancies.

BluePrism.com | 5


Importantly, once the visual evidence has been processed and analyzed with AI, the digital worker can access information associated with vehicles of that type, age, mileage and value, along with information about the potential to fix the damage to the vehicle, based on legacy data and details of the insurance policy in question.

In these instances, digital workers can use standardized data to quickly decide whether it is cost-beneficial to the insurer to repair the vehicle following the accident or to write it off. In the event of a write-off, the digital workers can give an almost instant decision to the claimant at the side of the road, enabling a same-day settlement and payment into the claimant’s bank account within 24 hours. This is a massive improvement on the traditional processes associated with automobile insurance claims following an accident, which typically have involved multiple steps, significant delays and uncertainty and anxiety for claimants. By using intelligent automation, the insurer can provide a fast and seamless experience for customers and deliver a swift resolution in what can be trying circumstances following an accident.

The benefits to the insurance provider extend beyond delivering first-class customer experience. The insurer is also able to contain costs associated with the claim, including storage of the vehicle, third-party inspections and quotes to potentially fix the vehicle, as well third-party claimant costs such as vehicle rentals during the lifecycle of the claim.

Importantly, in some eFNOL cases, digital workers are not able to make a decision. For instance, where the cost of repair is very close to the cost of write-off, or where the value of the vehicle is above a set value or threshold. In such instances, the claim is passed on to a human adjustor for investigation or adjudication, to ensure a correct decision is reached. Human and digital workers collaborate on the claim but, significantly, human adjustors are only focused on high value and complex cases, rather than simple and straightforward claims.

Using IA to deliver eFNOL capabilities is likely to become far more common in the coming years, as firms accelerate their shift towards an augmented workforce. More automobile insurance companies are already using AI and digital workers to access data around legacy vehicle costs, assessing ‘’damaged-to-fixed’ costs against online vehicle valuations.

However, over the next few years, we will see insurers increasingly using IA in decisioning as well. Using AI capabilities not only to evaluate data in real time but also to make data-driven decisions is incredibly powerful within insurance processes and a potential game changer for insurance providers.

Beyond auto insurance, IA is also being deployed to drive claims management within a claims lifecycle for travel insurance. An example of this is an insurer who is using the enhanced capabilities embedded within the IA platform to handle claims when an

6 | BluePrism.com


individual becomes sick or injured while in a foreign country. Typically, these types of claims involve large amounts of paperwork (from doctors, hospitals, hotels and travel operators) in multiple languages and containing multiple currencies. For adjustors, gathering all of the information and putting it into a coherent and consistent format can be extremely time-consuming work.

However, one travel insurer is now using digital workers, and embedded functionality such as optical character recognition (OCR) and a translation engine to extract meaning, context and understanding from all of the documentation that is provided. Digital workers are able to understand the value of invoices (and thresholds can be set for high-value claims), spot check all of the data, values and currency conversions, and automatically and instantly pay out on the claim. If there are any data points or values that the digital workers do not understand or if there appears to be a discrepancy in the information provided, the claim is passed on to a human adjustor for evaluation and then given back to the digital worker for execution of payment.

The deployment of the broad range of capabilities embedded within a cloud-based IA platform, including OCR, natural language understanding and translation capability, is giving time back to human adjustors, freeing them up to focus on high-value cases, leading to more accurate and cost-effective decisioning, and delivering a faster, more seamless experience for customers.

Looking Ahead: Reshaping Future Strategy with Intelligent Automation

As this report shows, there is already a broad range of areas where IA can be applied across all aspects of the insurance sector, from issuing new insurance policies and optimizing customer onboarding to claims management, and fraud detection and prevention. The number of use cases, and the sophistication with which the digital workforce is deployed, will undoubtedly increase over the next three years as firms turn to automation to optimize processes, deliver enhanced services and deliver on digital transformation goals.

Thanks to the integration of AI and process automation within an IIA platform, innovative firms are now positioning automation as a key strategic lever within their business strategies, rather than as a tactical and technical program to strip out cost.

The COVID-19 pandemic will further accelerate deployment of IA among insurers that are already deploying a digital workforce. They have now experienced first-hand the capabilities of digital

One innovative firm is, therefore, using intelligent digital workers to check the data and terminology contained in every customer policy to improve accuracy and negate potential issues down the line. This ensures no variation in compliance.

BluePrism.com | 7


Blue Prism is the global leader in intelligent automation for the enterprise, transforming the way work is done. At Blue Prism, we have users in over 170 countries in more than 1,800 businesses, including Fortune 500 and public sector organizations, that are creating value with new ways of working, unlocking efficiencies, and returning millions of hours of work back into their businesses. Our intelligent digital workforce is smart, secure, scalable and accessible to all; freeing up humans to re-imagine work.

To learn more visit www.blueprism.com and follow us on Twitter @blue_prism and on LinkedIn.

© 2020 Blue Prism Limited. “Blue Prism”, the “Blue Prism” logo and Prism device are either trademarks or registered trademarks of Blue Prism Limited and its affiliates. All Rights Reserved. bp_WP_IA_Insurance_200923_df_Rev

workers to adapt to fluctuating demand, maintain operational excellence and consistency in the most chaotic circumstances and fill in sudden gaps in their resource base.

IA will not only form a key part of their digital transformation strategies going forward, but will also be central to their business continuity and availability programs.

Firms that have not yet deployed IA will surely recognize the weaknesses, rigidity and constrictions of their traditional operating models, and be eager to catch up with the competition as speedily as possible.

They will want to ensure they have access to an intelligent and fully scalable digital workforce, to the agility and resilience to succeed in what is expected to be an increasingly uncertain and turbulent economy.

IA represents a vast and exciting opportunity for insurance providers to transform their operating models, digitize their go-to-market propositions and pursue new opportunities in a fast and scalable way. As the insurance industry enters what is likely to be a huge period of innovation and disruption, it is the ability of firms to optimize their use of digital labor that will determine the winners and losers.

Documents

CLAIMING THE FULL BENEFITS OF INTELLIGENT AUTOMATION IN