Succeeding at RPA. 5 critical considerations for insurance

June 8, 2021 BDO CANADA

 

Market statistics 1 show that only 30% of enterprises are very satisfied with their automation installs when considering business value and cost savings. An astonishingly low rate given that 75% of organizations say they are automating now or will be soon.

Done well, robotic process automation (RPA) is an impactful digital solution helping insurer’s address:

  • Increased, and costly, regulations
  • Shrinking margins
  • Aggressive competition
  • The need for cost-efficiencies
  • Staff retention and the opportunity to focus on higher-value work

RPA, or the utilization of robotics to automate high-volume, routine administrative tasks, is essential to the insurance industry’s future. Adopters frequently implement in areas such as:

  • Client prospecting and acquisition
  • Underwriting
  • Claims adjusting

The cost, tangible and intangible, of a poor or failed implementation, is substantial.

Below we address the critical elements that can make or break the adoption of a digital labour initiative.

1. Selecting the right place to start

The purpose of RPA is to automate a series of tasks that inevitably form a process that is core to the functioning of a business.

Automation requires a standard, consistent approach to both the tasks and the steps involved along the way. It also requires all relevant stakeholders to operate uniformly.

BDO works with clients to employ a proprietary approach named the “Power of One.” In simple terms, this solution ensures that organizational processes are effective, unified, and consistent across all key teams and individuals.

The most common starting points are:

  • Client service processes, specifically those that offer a tangible competitive advantage
  • Financial operations requiring secured and fully functional processes accessed from multiple remote environments
  • Internal IT operations, frequently comprising of those that improve operational efficiencies, reduce obsolescence, unnecessary duplication, or the need for manual intervention

Transforming a model with ingrained people-dependent processes and habits to one where rote and objective work is automated and human capital is focused on elevated outcomes is challenging.

BDO’s Technology team works with clients to deliver an RPA Assessment identifying a range of start points from those with minimal change and disruption to those whose cost-efficiencies will have a tangible impact on the bottom line.

2. Start small, realize the potential, and scale fast

Keeping the larger picture in mind, successful adoption of RPA often begins with a small initiative with defined objectives.

Identify one to two processes with the highest volumes of:

  • Manually intensive
  • Rules-based with few exceptions required
  • Time-consuming, and
  • Routine and repetitive work that is prone to errors

Examples might include:

  • Policy quotes for simple services
  • Underwriting
  • Invoicing and payments processing
  • Back reconciliation and EFT remittance
  • New employee IT onboarding, and
  • IT service desk automation and procurement

Once RPA has been successfully adopted, benefits realized, and larger stakeholder group buy-in obtained, we recommend broadening your scope and creating a cross-departmental RPA committee within your organization to review the processes, assess areas that might benefit from the application of technology, and prioritize further automation projects.

3. Strategic prioritization is the key

Organizational goals and your RPA Assessment are critical inputs to decisions related to prioritizing the ongoing phases of automation projects. A simplified approach might be expressed as:

  • Identify the priority challenge(s) you need to solve
  • Example, if staff retention is the key, then understand
    • The specific implications and costs of no solution
    • The impact of disruption when implementing an automation solution
    • The cost of implementation (software, training, downtime, etc.)
    • The anticipated timeline for realizing tangible beneficial impacts of implementing a solution
  • Repeat for other projects in order of priority

It is important to remember that organizational goals and strategies are kinetic and respond to external and internal opportunities and threats. Establishing a formal periodic review of your priorities is key to realizing a fully automated organization.

4. Automation and artificial intelligence does not replace human ingenuity

We engage in constant discussions with clients around the extent that automation can replace human interaction and decision-making capacity.

The simplest example we use to explain the limitations of automation is that of client discounting.

It is practically impossible to automate all of the multiple subjective inputs required to assess whether a discount should be given in a specific situation. If client satisfaction and retention are layered into that decision, then human intervention becomes essential.

A hybrid approach is the most effective solution in almost all RPA projects. Automation focuses on high volume, repetitive and objective tasks. Realizing the value of allying robotic accuracy at speed with human intervention and subjective thinking at critical points of a process is frequently the definition of successful automation.

5. Invest in the people aspect of automation

One of the most common reasons for ineffective implementation is resistance to the implementation of RPA. The organization must assess whether work-life improves for the stakeholder or, at least, does not decline because of the automation.

The perception that the robot replaces the human is true but does not have to be negative. Automation allows humans to focus on high-value and impactful work while robots remove tedious tasks.

In effect, it creates a “Digital Assistant” for those in the organization not always used to support. Develop full transparency and a positive journey for your teams through RPA, from ideation to implementation.

Understanding the impact of automation, providing space for those involved to share concerns, co-developing automation solutions with stakeholders, and offering complete transparency through the implementation can move your team from concern to embracing their new digital assistant.

How BDO can help

The BDO approach supports the entire RPA journey and is committed to working with clients to ensure a successful implementation. From clients looking at their first project to those reviewing an entire automated organization, we provide the holistic, strategic, and pragmatic support required to realize your objectives.

Talk to us today.

Contact:

Daryl Senick
Partner, IT Solutions
dsenick@bdo.ca

Andrey Isaev
Practice Leader, Modern Workplace – Digital Labour
aisaev@bdo.ca

Mike Gelesz
National Industry Manager, Banking
mgelesz@bdo.ca

 

1 Enterprise satisfaction with robotic processing automation (RPA) installs for business value and cost savings, as of 2017. Statista. June 7, 2018.

 

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