Insurers’ profitability (and survival) is being threatened by a myriad of challenges—rising policy lapses due to higher premiums, customer churn from tightening budgets, and skyrocketing customer expectations. Squeezed by these pressures, insurers must find ways to improve efficiencies in their core processes. But there is a way forward for insurers: Business process management (BPM), an approach to improving organizational processes that is designed to optimize work.
In this post, learn how insurers can adopt this methodology for their core processes to streamline work and produce better results for customers.
4 steps to apply BPM to insurance.
There are four steps to BPM: design, execution, measurement, and optimization. Let’s apply those four BPM steps to automate underwriting, a core area where optimization is especially needed: research from Accenture shows that insurance companies stand to lose $85–$160 billion over the next five years because underwriters have to spend 40% of their time on non-core activities.
1. Design a new process.
To begin, map out your future-state process, the version that corrects existing inefficiencies. Consider using low-code development to help you design your new process more quickly. A low-code application development platform includes automation and data management capabilities that let you automate insurance workflows to cut out manual work and bring disparate data sources together in one centralized location. Here are five ways you can rework an underwriting process with automation:
- Automate data ingestion. Use AI to extract structured and unstructured data from multiple sources (e.g., ACORD forms, loss runs, emails, broker forms, etc.) to more accurately evaluate and select risk.
- Increase submission efficiency. Automate tasks like identifying missing or incorrect information and requesting additional details, coverage checks, and data duplication.
- Optimize submission triage. Use automation to assign submissions to the appropriate underwriter based on workload and skill set.
- Unify your data. Bring data together with a data fabric, a capability you can find in some low-code application development platforms, to integrate data from disparate sources and create one complete view of the customer for underwriters.
- Improve collaboration and communication. Provide brokers with self-service portals that enable them to submit applications and track their progress in real time. Consider integrating your automated underwriting systems with brokers’ systems to enable faster and more accurate policy issuance.
See how you can apply this methodology to any insurance process in the BPM Guide: The Key to Workflow Automation.
2. Execute the process.
In this phase of BPM, you’ll put your new process into action. When considering what solution you should choose to build and deploy new digital solutions, keep these criteria in mind:
- Integration. Real-time access to data is essential for making informed decisions. Look for an underwriting workbench with data fabric capabilities that can unify data silos across your organization and provide a real-time view of all the information your underwriters need.
- Flexibility and customization are also important. You'll want an underwriting automation system that can be tailored to fit your specific risk management requirements.
- AI-powered solutions can take your underwriting to the next level by analyzing vast amounts of data with advanced analytics and machine learning algorithms to help you make faster, better-informed decisions and offer more accurately priced policies.
- Security. Your underwriting application should be built on a platform with enterprise-grade security. Look for an underwriting solution that has advanced business activity monitoring and governance capabilities to keep your customers’ data safe.
3. Measure performance process.
In this step of applying BPM to insurance, gather data on performance and compare it to the old process’s performance so you can analyze if your new design creates better results than the original. Identify return on investment so that you can apply your approach to other processes in the business.
4. Optimize for continuous improvement.
Even when you’ve finished remodeling and your process is operational, getting all the benefits of BPM requires that you focus on continuous improvement. To help you continue to optimize, build your applications on an underwriting platform that provides a fully integrated, low-code workspace for discovering, monitoring, and optimizing process inefficiencies. Solutions like the Appian Platform provide automatic patterns discovery and intelligent recommendations for guidance for where to optimize.
Now that you’ve seen how BPM and insurance work together, let’s look at an example of a health insurance company applying BPM to their enrollment process.
Example: BPM for health insurance.
A health insurer wanted to provide coverage options across the country by allowing people to submit enrollment applications via mail. But to accomplish this with their existing workflow, they’d have to dedicate a team of employees to manually intake, route, and review all the paper applications and send communications back to applicants. They decided to build a custom digital application via a low-code process automation platform to handle these tasks.
They designed the new process with these steps:
- An employee receives a paper application and scans it into the system. This triggers the process to begin.
- The application uses AI to extract data from the document.
- Business rules determine an applicant’s eligibility. If the applicant is deemed eligible, the app triggers a workflow that adds tasks to the appropriate employee’s queue. If the applicant is deemed ineligible, the application generates a response to the customer and notifies employees as needed.
- If any inconsistencies are detected in the data, the system automatically creates documents to notify applicants that additional information is required and notifies employees as needed.
- Real-time analytics on a dashboard help team leads keep track of progress toward goals.
Once built, the company started using the case management system to process new paper applications. They ran it for three months, then went back to compare results with the last three months of their former process. They found they could now manage up to 50,000 paper applications per day during their peak season. The team also found that by adding in more automation after applicants were deemed eligible, they could save employees even more time, so they implemented this optimization and put it in motion to retest in another month.
See how Aviva Insurance, a multinational insurance company with 33 million customers, achieved 9x faster customer service with a BPM approach.
Why use BPM in the insurance industry.
Applying BPM to insurance processes creates efficiency, which cuts costs. But it’s not just that. With BPM, you’re also improving the customer experience by reducing the time it takes to produce new policies and process claims. And when you add in low-code process automation and data fabric capabilities, you’re also helping your business become more agile and able to quickly respond when the market, customer demands, or regulations change.
Learn what you need to do in 2024 to make sure you’re offering a modern, connected insurance experience in our guide, Connected Insurance: The 5 Pillars for a Modern Customer Experience.
