Why RPA in Insurance is a Transformative Force
Why RPA in Insurance is a Transformative Force
Andrey Koptelov, an innovation Analyst at Itransition, discusses the transformational benefits of adopting RPA in the insurance industry.
Why RPA in Insurance is a transformative force

The world is undergoing a massive digital transformation, and the insurance industry is at the forefront of implementing Robotic Process Automation (RPA) to stay ahead of the competition. RPA has emerged as a transformative force in insurance, automating repetitive and mundane tasks, streamlining workflows, and ensuring compliance.

It can enhance customer experience, improve operational efficiency, and reduce costs. In this article, we will explore how RPA is shaping the future of the insurance industry, outline a few use cases, and provide implementation tips.

Understanding RPA in insurance

RPA, or Robotic Process Automation, is a powerful technology that uses robots or software bots to automate repetitive and rule-based tasks such as data entry, claims processing, underwriting, policy administration, and fraud detection. RPA solutions can work 24/7 without getting tired, unlike humans, and can complete tasks with a high level of accuracy and consistency. 

Use cases of RPA in insurance 

The insurance industry is ripe for RPA implementation. Some of the most potent use cases of RPA in insurance include the following: 

Claims processing

RPA can automate claims processing by extracting relevant data from customer claims and entering it into the insurance claims management system. It can validate data, determine a potential payout, and send notifications to policyholders. The system can process all standard claims, while human customer service agents handle customers with complex claims.


Conventionally, underwriters spend inordinate amounts of time analyzing data from various sources to assess risks and determine adequate rates for a customer. RPA bots can streamline this process by pulling data from external and internal sources and quickly building a customer’s risk profile. RPA makes the underwriting process faster, more accurate, and cost-effective.

Policy administration

Policy administration is an important but complex task requiring a lot of manual work. RPA can automate the policy writing process by screening clients, verifying their credentials, and creating personalized policies. Bots can also help with policy renewal tasks like payment reminders and periodic checks for customer eligibility.

Fraud detection

RPA can detect fraud with a high degree of accuracy. By leveraging data from various sources, RPA bots can identify anomalies and detect fraudulent activities in real time. As a result, automatic fraud detection helps insurers reduce losses and boost customer satisfaction by providing quicker resolution times.

Customer service

Adjusting to the constantly changing customer inquiries has always been a major pain point for insurers. RPA bots can help by handling simple customer queries, automating appointment scheduling and order processing through chatbots and virtual assistants, and freeing manpower resources to focus on more complex customer problems.


Insurers should comply with a wide range of federal and state regulations. Given that RPA leaves an audit trail of its actions, insurance companies can simplify compliance monitoring and be more confident during the next external audit. This is especially useful for insurance companies dealing with complex compliance regulations, such as those in the healthcare industry.

Customer onboarding

RPA can also facilitate customer onboarding by automatically verifying customer information and reducing the chances of errors. For example, bots can quickly compare customer data with KYC documents and check for any discrepancies. This can reduce the amount of paperwork required and shorten the time it takes to process customer applications.

Insurance implementation challenges in RPA

Adopting RPA in insurance has its challenges. Here are some of the key implementation challenges that insurers may face:

Change management

Implementing RPA requires fundamental changes in the way insurers conduct their daily operations. Employees can find it difficult to adjust to new processes, and change resistance can slow down the adoption of RPA. This is why it is essential to have a well-defined change management process in place.

Integration with legacy systems

Insurance companies usually have complex legacy systems handling multiple processes. Integrating RPA solutions into these systems may be challenging and requires skilled personnel to ensure the smooth transition of data from one system to another.

Data availability 

The effectiveness of RPA solutions is reliant on the availability of structured data. If the data is not structured, insurers cannot expect RPA solutions to work adequately. Hence there should be a focus and investment in ensuring data is structured and easily accessible.

Security concerns

Insurance companies need to be mindful of security risks when deploying RPA solutions. Since bots access sensitive data, there is an increased risk of accidental or malicious misuse. Therefore, companies should ensure that the access permissions for their bots and other automated processes are tightly controlled.

RPA implementation tips

The key to successful RPA implementation is proper planning and execution. Here are some tips for a smooth transition:

Select the right processes

In most cases, it’s wise to start with the most simple and straightforward processes and then gradually move on to more complex ones. This will help you gain experience and build confidence in the system.

Involve all stakeholders

RPA implementation requires collaboration across departments, involving all stakeholders, including IT teams, process owners, and end-users. Therefore, it’s important to ensure that everyone is on board and understands their roles in the process.

Invest in training

To realise the full potential of RPA in insurance, employees should have the necessary knowledge and expertise to operate and set up bots themselves. That is why it’s crucial to ensure your vendor can provide tool-specific training for your team.

Maintain continuously

Like any other technology, RPA bots require timely support and maintenance for smooth operation. Be sure to set aside time and resources for regular maintenance of your bots so that they can continue functioning properly in the long run.

A final word on RPA in insurance

Robotic Process Automation is transforming the insurance industry by streamlining operations and increasing efficiency. From claims processing to fraud detection, RPA can enable advanced automation and free insurers’ time for more cognitively demanding tasks. With proper planning and execution, RPA can bring a significant competitive advantage. With the help of comprehensive training programs and clear roles for all stakeholders, insurers can ensure a successful RPA adoption within their organizations.

However, no matter how robust the RPA implementation is, companies must also pay attention to security concerns and monitor their bots closely for any suspicious activities. By following these best practices and investing in the right solutions, insurers can leverage the full potential of RPA and gain an edge over their competitors.

About the author: Andrey Koptelov is an Innovation Analyst at Itransition, a custom software development company headquartered in Denver. With a profound experience in IT, he writes about new disruptive technologies and innovations.

Share this article:

Insurtech Insights USA 2024

Join us at USA's leading insurtech conference at Javits Center on June 5-6th, uniting over 5,000 senior insurance professionals!