20 million claims a year, a claim every three seconds – insurance automation in action

You don’t need us to tell you that automation is the talk of the town in the insurance industry or that it saves time and money – after all, that’s what it was invented for in the first place. But perhaps you’re hesitating: is it worth the hassle? In most insurance companies, introducing automation requires major modifications to infrastructure, and the mere thought of it gives you a headache. Will it pay off in the end?

Hubert International Expansion Unit

2 June 2022

The short answer? Yes, it will. But we don’t expect you to take our word for granted.

The numbers don’t lie

Automation provides gains in one of two ways: by decreasing something you don’t want (like costs) or increasing something you want (like productivity). Let’s take a look at an example of each.

Costs down by 100 000 man hours

Yes, you read that right: one hundred thousand man hours.

Labor constitutes one of the largest expenses for every company – unless it’s optimized with automation. In that case, it can drop at a rate of thousands of hours a year, as it did for Dai-ichi Life Insurance. The company implemented automation to handle nearly 500 various tasks, which cut labor time by one hundred thousand hours. Actually, scratch that – we rounded the figure for effect. The exact number cited by Kei Maedomari, Life Insurance Manager at Dai-ichi, equals a whopping 132 000 man hours. Even by modest calculation, if you take the US minimum wage as a baseline, that number represents a saving of one million dollars (Fig. 1). But Dai-ichi isn’t stopping there. The next step is to automate even more tasks, aiming to eliminate up to half a million man hours from its budget – equivalent to 3.5 mln dollars worth of minimum wage.

Fig. 1: Results of automation

Productivity up to six times higher

Automation doesn’t simply replace labor; it also ramps up productivity by doing the labor more quickly and efficiently. Consider Allianz Insurance, which has used AI-based automation to streamline part of its injury claims processing down to a single click. Or Lemonade, an innovative real-estate insurance start-up whose AI system processes a claim in between three minutes and 3 seconds. There’s also a company that uses bots to handle more than 20 million claims a year, speeding up its processing times by a factor of six.

An ROI of even 200% in the first year

Huge numbers illustrating automation benefits sound impressive, but they don’t provide a lot of insight without context. Before making a decision, every businessperson wants to know this: does it pay off in the end? What is the return on the investment? To find out, let’s give the floor to Leslie Willcocks, professor of technology, work, and globalization at the London School of Economics: “The major benefit we found in the 16 case studies we undertook is a return on investment [in insurance automation] that varies between 30 and as much as 200 percent in the first year.”

Those who hesitate are lost: your rivals aren’t

If you’re not one hundred percent on board with implementing automation, bear in mind that the competition is already beating you to it. According to Deloitte’s report “2022 Insurance Outlook”, 65% of insurance companies intend to increase spending on automation (Fig. 2). Do you?

Fig. 2: Insurers expecting to increase spending on automation (adapted from Deloitte)

If so, consider using our services – we are a technology consultancy company whose business and technical experts have proven results in implementing automation for the biggest players in the industry.

Why us? Up to 75% drop in claims processing time for Vienna Insurance Group

Let’s say you’re sold on the idea of automating your insurance company. Why should you trust us with the job? Because Vienna Insurance Group did, and never looked back. Our automation implementation resulted in a reduction of claims processing times by up to 75%. The solution earned us the Eagle of Business award and prompted a VIG executive to say they “won’t be going back to manual processing”.

Are you still driving manual? Let’s switch to automatic together!

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