Driving profitability in insurance with
process mining
In a world where the only constant is change, the insurance sector stands at the crossroads of process innovation. The industry is confronted by multiple challenges wrought by shifts in technology, workforce, customer demands, societal expectations, macroeconomic changes, and political complexities. Insurance firms worldwide are therefore being compelled to transform their business models, tech infrastructure, and products and services to not just fuel profitability but to stay relevant.
Consider this. In a survey by Accenture, a third of home insurance and auto insurance claimants were not fully satisfied with their most recent claims experience. This could put US$170 billion in premiums at risk over the next five years as customers can switch to another insurer. Underwriters are spending 40% of their time on non-core activities, representing an opportunity to integrate emerging technology into their processes to make up to US$160 billion through efficiency gains over the next five years.
The need to embark on a transformation journey was never more pressing. Insurers need to become more insight-driven, customer-centric, and more agile. Process Mining can be leveraged as a tool for transformation. It can empower underwriters to deliver one-on-one customer experiences and optimize processes to improve efficiency in underwriting, which can lead to increased profitability.
To shed light on industry trends and the role of process mining in the insurance sector, we speak to Sayan Das, Sr Director – Global Solutions. He also talks about the impact of emerging technologies on process excellence and Areteans’ solution offerings for continuous process optimization for insurance players.
What are the key challenges and opportunities for underwriters in today’s insurance landscape?
The insurance sector is witnessing significant changes that present both challenges as well as opportunities. Underwriters are facing profitability issues despite the growing market. For instance, non-life insurers in the US suffered a net underwriting loss of US$26.9 billion in 2023, mainly due to rising costs.
Rapidly evolving customer needs and employee expectations have put immense pressure on the industry to reinvent business processes. Increasing compliance requirements and the evolving risk landscape have added further complexity to the business. On the other hand, the influx of big data and the ability to leverage advanced analytics for process optimization present opportunities to deliver enhanced customer services.
There is a growing demand for innovative products for emerging risks due to climate change and cyber threats. Millennials and younger consumers are seeking insurance products for safety, sustainability, and holistic physical and financial well-being. And the rising aging population presents opportunities for newer and more comprehensive health and well-being products.
How can process mining play a role in transforming the insurance sector?
Insurers can use process mining to examine how their people and systems manage business operations. It will help them uncover inefficiencies and hidden value opportunities, and implement targeted actions to enhance process performance. Process mining can be applied in core operations such as claims management, underwriting, and other processes such as procurement, finance, and HR.
How can emerging technologies such as AI, ML, and generative AI contribute to process excellence in the insurance sector?
Artificial Intelligence (AI) and Machine Learning (ML) have emerged as game-changers in the insurance sector. They can enhance operational efficiency, risk management, and customer experience when implemented correctly. AI streamlines operations by automating time-consuming and repetitive tasks, such as data entry, document management, and policy administration, freeing up valuable human resources. AI-powered risk assessment and predictive analytics can identify high-risk customers and allow insurers to offer customized policies that meet their unique needs.
Deep learning and ML algorithms can detect patterns and anomalies in data, helping insurers identify potentially fraudulent claims and thereby reducing losses. Generative AI can take it a step further by assisting underwriters in transforming their operating model from end to end. Gen-AI-powered assistants can provide information from various sources to agents in customer service or claims management, accelerating complex decision-making.
Sales teams can leverage generative AI to create effective sales lead lists and craft personalized sales scripts. Insurers can develop more targeted customer experiences with deeper insights into customer behavior. By investing in cutting-edge technologies, insurers can achieve process excellence, resulting in increased efficiency, higher profitability, superior customer service, and continuous compliance.
What role does Areteans play in continuous process optimization for insurance players?
Areteans leverages AI, ML, and advanced analytics to enable insurance players to continuously optimize their processes. Our accelarator , Digi Insurance, is a modular end-to-end product that offers smart engine decisioning to handle new policy issuance, mid-term adjustments, renewals, servicing inquiries, and claims management in real-time. It can automate and streamline different business processes. Additionally, it can enable contextual engagement with leads and existing customers.
With the entire sales process in a unified, powerful tool, Digi Insurance empowers underwriters to manage leads, nurture prospects, and close deals seamlessly. The product offers features for dynamic and adaptable underwriting processes that offer intelligent risk predictions and next-best underwriter recommendations. Moreover, Digi Insurance’s advanced capabilities enhance the ability of insurers to detect fraudulent claims and excess claim amounts, leading to significant savings and improved risk-management processes.
Our solutions help insurers automate and optimize their processes to make informed decisions based on data-driven insights and achieve better outcomes for their customers and their business.
By leveraging AI-powered process mining solutions that offer visual representations of business processes, intuitive dashboards for reporting and analytics, and the capability to process real-time information and events, insurers can successfully pursue continuous process optimization and maximize profitability.
Discover how Areteans drives process excellence in insurance.