Blog Post

7 Digital Process Automation Benefits for Insurance Companies

April 27, 2022

Modern digital process automation tools are offering new ways to automate processes to help companies improve how they grow, expand, and operate day to day. This is especially true for insurance companies handling large volumes of data for many individual customers.

The insurance industry is data-intensive, requiring organization, streamlined workflows, and very deliberate software architectures. If you're wondering about the benefits of digital process automation for insurance companies, let's dive in.

Digital Process Automation and “Industry 4.0”

It wasn't too long ago when experts were talking excitedly about companies using new methods of data collection to provide business insights. The cloud was the collective frontier and companies were scrambling to use data center and data aggregation tools for business intelligence. Since then, the idea of process automation has emerged, too.

Many types of automation are made possible by new cloud-delivered technologies and virtual hardware systems. In other words, it would be hard to build modern automation tools that benefit companies with yesterday’s outdated hardware and software systems.

In any case, there are several benefits of digital process automation for insurance companies if they implement these innovative services in today’s business world.

1. Handling Multiple Requests and Repetitive Processes

It's easy to see how even simple automation of insurance contract handling can bring vast efficiencies, and a multitude of benefits for a business of any size.

For example, the typical insurance agent deals with hundreds of clients each year. That means that individual tasks like sending out letters and updating or analyzing customer histories might be done hundreds of times within a given service cycle.

In the past, that meant someone sitting at a computer and manually repeating the same small task, hundreds of times—but not anymore. Digital process automation takes much of the raw data and applies it to workflows, so humans don't have to do it manually. Sometimes, a human will sign off on the task as it's done. Sometimes he or she can review it later. Either way, the human operator can in some ways sit back and let an algorithm do the grunt work.

Handling multiple requests at once is just one of the many digital process automation benefits for insurance companies that leads to far greater productivity. That, in turn, pushes profits up. In terms of additional benefits of digital process automation for insurance companies, it can also decrease turnover and boost employee retention, as people feel empowered to do their jobs better with new, assistive technology.

Another way to think about this is to split the operations of the company into individual microservices. For example, you might have account creation, account analysis, long-term sales, account optimization, and customer relationship management as key tasks. Then, you can chunk down these tasks with even finer granularity into:

  • Policy establishment
  • Policy renewals
  • Policy additions, such as adding another individual or asset to a policy
  • Policy terminations

Experienced insurance professionals often say there's a dual component to these kinds of tasks. There's changing something in the system, and then there's the communication aspect of the change. Both can be handled with modern digital process automation tools.

2. Security and Data “In the Fold”

Process automation brings profound security benefits, too, and that really stands out for businesses in the insurance industry that deal in medical or health data.

With the introduction of the Health Insurance Portability and Accountability Act (HIPAA) in 1996, hospitals, insurance companies, and other stakeholders suddenly found themselves responsible for safeguarding PHI, or protected health information. So, in the massive health insurance industry, where billing, coding, and document processes are so important to revenue cycles, businesses must also meet stringent data security terms.

In a digital environment, many individual tasks are automated. To some degree, proper security protocols are automated, too. It's easier to ensure that everything is inside the same safe and secure ‘bucket’ or walled-garden system. That, in turn, alleviates much of the anxiety that business leaders may feel regarding HIPAA compliance, for other privacy-related benefits of digital process automation for insurance companies

In some ways, electronic medical records and electronic health records were the first generation of digital health data handling.

They had ways to standardize clinical care and treatment, but they didn't have as much functionality on the clerical side.

Digital process automation easily accomplishes this optimization for insurance companies and other industries involved in the same data-intensive processes that fall under the HIPAA umbrella.

3. Funnel Optimization

Another benefit of digital process automation for insurance companies is funnel optimization. This isn't necessarily the sales funnel, but rather the customer's journey throughout the life cycle of their account. 

In fact, one way to understand the core operations of an insurance company is to view each customer account as a comprehensive object that the company needs to manage from signup to policy termination.

Digital process automation benefits for insurance companies include creating a seamless flow in the journey of each client. Think of the insurance funnel as a linear process—a subway line with many ‘stops’ along the way. The better you can connect these sequential stations, the easier the insurance process works.

4. Transparency for Collaboration

There are typically several people in an insurance company that may have eyes on the same account—meaning collaboration is key. Transparency is another digital process automation benefit for insurance companies. Transparency is built into these automated tools, allowing different people to interact with the same account, or contribute to its maintenance and care, in their own respective ways.

Collaborative transparency is important in insurance. For instance, people coming to a file need to understand the history of the customer's policy, what it covers, and what it costs. They may also need to look at key contextual data including:

  • ZIP Codes
  • Customer risk factors
  • Customer assets
  • Customer financial information
  • Level of education

Insurance is data-intensive. That's why digital process automation can benefit insurance companies.

5. Adding Apps with APIs

What's better than having a comprehensive digital process automation system in place? It's having one that you can add to with easy connected features!

Nowadays, professionals use the application programming interface (API) to combine standalone software systems and let them ‘speak to each other’ in ways that promote a connected, networked system. So, automation process tools that have that kind of API functionality are very valuable to insurance businesses and others.

6. Eliminate Tedious Data Entry

To get another view of benefits of digital process automation for insurance companies, look at it from the agent’s viewpoint.

Traditional management of insurance companies included a lot of tedious manual data entry. Then, all that data also had to be manually curated and updated. As companies add process automation in deliberate layers, and apply it to workflows in targeted ways, they gradually eliminate some of the most tedious aspects of the job.

That can boost morale, reduce turnover, and lead to better employee retention. Modern businesses that understand the value of talent recruitment and retention know the benefits of this better than anyone.

7. Automation and Handoffs

Insurance companies won't operate with the same people forever. People climb the ladder, look for jobs in other industries, or retire. Systems become obsolete or get updated, and every task the outgoing person handled gets assigned to a new agent. 

Passing the torch is much easier with digital process automation.

Onboarding can be easier, too. From useful handling of learning and training modules to better identity and access management, this is another place where a centralized automation tool can really shine.

Digital Process Automation Benefits with Image API

By automating a variety of processes, DPA tools can make the work of an insurance company more efficient, more productive, safer, and more transparent. Customers can be better served. Reps can rely on data at their fingertips, and enjoy less labor-intensive processes. The company as a whole can see enormous savings and ROI from putting one of these systems in place. 

For a system that's easy to install, with modern functionality, and all the features you'd expect from a next-gen automation platform, learn more about Caledo—Image API's new digital process automation software platform that allows you to easily digitize one process at a time, and add more processes as needed.

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