The Automation Advantage: Transforming the Future of Insurance

The insurance industry is quickly moving into a digital-first future where emerging technologies will reshape the way policies are sold, claims are processed, and risks are managed, and where market leaders are automating critical workflows to deliver seamless experiences, enhance customer satisfaction, and unlock profitability.

For example, by 2030, AI-powered automation could boost productivity in insurance processes and reduce operational expenses by as much as 40%^[1]. Leading companies are already experimenting with telematics, the Internet of Things (IoT), and conversational AI models, like ChatGPT, to analyze large volumes of data, help underwriters better assess risks, and improve customer service. Buckle up as we explore how insurers are leveraging the speed and power of automation and AI to improve operational efficiency and keep pace with ever-rising customer expectations.

With technology reshaping the insurance landscape, insurers are embracing innovative solutions to stand out from competitors. For example, today:

^[1] McKinsey

•  Drones equipped with special sensors and cameras hover above a disaster area, automatically capturing and analyzing critical information for insurers.
• Telematics software and automobile monitoring systems automatically track everything from braking and accelerating patterns to how much and how far a car drives to offer more personalized and accurate insurance coverage.
• AI automatically compiles and assesses data from new and emerging technologies at a speed and volume unimaginable just a decade ago.

In short, automation isn’t just the future of insurance—it’s also the present.

[ How did commercial insurer CNA improve underwriting processes and realize a 60% time savings? Get the case study  ]

Underwriting, assessing risk, and determining policy premiums has traditionally relied on manual analysis and decision-making. To be successful at underwriting requires a careful balance between speed and accuracy. With the rise of process automation, insurers can streamline the underwriting workflow, making it more efficient and accurate. The best process automation solutions allow insurers to:

• Leverage algorithms and data analysis to evaluate risks.
• Make faster, more accurate underwriting decisions.
• Overcome the challenges of data quality and regulatory compliance.

For example, CNA, a leading US-based, global commercial property and casualty insurance company, developed ComPass™ on the Appian low-code and process automation platform to improve operational efficiency across 164 countries. CNA’s automation solution allows insurance agents and underwriters to write and manage local-admitted policy placements in real-time, identify potential issues, and access the status of claims and payments, all within the Appian Process Automation platform.

[ Would you like to learn more about how to optimize underwriting workflows? Get the whitepaper: Unlock the Power of Connected Underwriting. ]

Claims processing has historically been complex and time-consuming, often leading to customer frustration. Automation is transforming this aspect of insurance by streamlining claims handling and boosting efficiency, accuracy, and speed. For example, a global leader in property damage and fraud detection in property claims, used Appian’s AI-powered process automation platform to create a new claims management solution that improved claims and payment processing efficiency and achieved a 99.7% customer satisfaction level.

Process automation allows the company to quickly review, index, and process a massive amount of claims information with the help of Optical Character Recognition and Machine Learning models that automatically verify invoices, detect fraud, and estimate repair costs while accelerating the claims process and boosting customer satisfaction.

Portal technology has undergone significant advancements, revolutionizing the way customers access and manage their insurance policies. With the availability of mobile-friendly portals and dedicated apps, insurers offer customers convenient access to policy and claims information on the go, empowering them to view policy details, update personal information, make coverage changes, and download essential documents at their convenience.

The automation of these processes not only simplifies customer interactions but also enhances engagement by providing instant access to information and empowering policyholders to independently make policy and account changes at their convenience.

AI and machine learning play a pivotal role in transforming the insurance industry. For example, integrating Chat GPT in customer support systems allows insurance companies to provide more personalized and efficient customer interactions. AI-powered chatbots equipped with Chat GPT can handle many customer queries, providing instant responses and reducing the burden on call-center agents. Customers benefit from faster query resolution and 24/7 support, improving customer satisfaction and loyalty.

 AI is also transforming underwriting decisions by leveraging vast amounts of data to assess risks more accurately and efficiently than ever before. AI-powered underwriting workbenches use advanced data analytics and machine learning algorithms to analyze vast amounts of financial, demographic and claims data to provide underwriters with a comprehensive view of an applicant’s risk profile.

As a result, underwriters can make better-informed decisions and accurately price policies, reducing the risk of loss for the insurer. AI-powered workbenches also automate many of the manual processes involved in underwriting, allowing underwriters to focus on higher-value tasks and make faster, better decisions.

Integrating telecommunications and informatics, Telematics is revolutionizing the insurance industry by offering usage-based policies. Telematics devices, such as black boxes or smartphone apps, track driver behavior, providing insurers with valuable data for risk assessment. Usage-based insurance allows policyholders to pay premiums based on their driving habits, rewarding safe drivers and encouraging responsible behavior on the road.

IoT devices are also integrated into insurance policies to monitor and prevent risks. Smart home devices, connected vehicles, and wearables enable insurers to proactively manage risks by collecting real-time data. For example, IoT sensors can detect and notify homeowners of potential hazards like water leaks or fire outbreaks, reducing the likelihood of claims and improving policyholder safety.

Would you like to learn more about how to optimize underwriting workflows? Get the whitepaper: Unlock the Power of Connected Underwriting.  ]

With predictive analytics, insurers leverage historical data and statistical models to anticipate future events and make informed decisions. In the insurance industry, predictive models are used for fraud detection, enabling early identification and preventing fraudulent activities. Additionally, predictive analytics improves pricing accuracy. See how market leaders use Appian for process automation success by helping insurers segment customers effectively for personalized offerings.

Looking back at the big picture, the insurance industry’s digital transformation transforms traditional processes and improves the overall customer experience. Automation, AI, telematics, IoT, and predictive analytics have proven to be game-changers, enhancing efficiency, accuracy, and customer satisfaction.

To remain competitive in the age of AI, insurance companies must continue to adapt and innovate by leveraging the power of automation, AI, telematics, IoT, and predictive analytics to navigate the ever-changing risk landscape. The future of insurance lies in the seamless integration of automation, AI, and human expertise to deliver a more efficient, personalized, and customer-centric underwriting and claims experience.

See how market leaders use Appian to stand out from the competition.