Insurers prioritise automation in claims processing to manage rising costs

A recent poll conducted by RDT among technology teams at insurance firms and Managing General Agents (MGAs) reveals a strong emphasis on automation, particularly in claims processing. An overwhelming 81% of respondents identified claims processing as the most critical area for automation, followed by policy administration (66%) and fraud detection (53%).

The escalating costs associated with claims have driven insurers to seek further automation. An impressive 94% of respondents believe that automating the claims process would significantly help in managing these rising costs. The poll highlights several other key advantages of automation, including improved efficiency (70%), increased productivity (52%), and streamlined processes (52%).

Despite the enthusiasm for automation, accuracy and error reduction remain crucial. 40% of respondents consider having a ‘human in the loop’ as business-critical for automated workflows, emphasising the necessity of human oversight in automated processes. Only 15% deemed this aspect as unimportant, underlining the industry’s cautious approach to fully automated systems.

Criticism also surfaced regarding the hasty implementation of automation in some market areas. A significant 85% of respondents believe that certain sectors have rushed into automation without a well-planned, step-by-step enhancement strategy. This rush has often led to inefficient or incomplete automation solutions.

When seeking technological support, 76% of respondents stressed the importance of collaborating with technology providers who specialise in the insurance sector and possess the necessary operational knowledge to ensure effective implementation.

Joe O’Connor, deputy CEO of RDT, emphasised the importance of a balanced approach in the transition to automation. “Automation is undoubtedly transforming the insurance landscape, but insurers and MGAs must proceed with a well-thought-out yet agile strategy. The findings from our poll clearly show that while there are significant benefits to be gained from automation, a considered approach utilising flexible technology combined with appropriate oversight is essential to avoid the pitfalls of hasty implementation.”

He added, “A human in the loop is not merely a safeguard; it is a vital component in many cases that ensures the integrity and accuracy of automated systems. This integration is not just a theoretical ideal but a practical necessity that is achieved with the right technology. At RDT, we partner with insurers to develop tailored, efficient automation solutions that address their specific needs and challenges, harmoniously blending advanced technology with indispensable human oversight. By doing so, we help our clients achieve the optimal balance between automation and human input, ensuring both efficiency and reliability in their operations.”

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Emma Cockings Emma is a content editor for Claims Media. Emma is a experienced writer with a background in client-centric personal injury for a major firm. She has attended and reported on multiple brokerage events throughout her career.