Robotics & Intelligent AutomationInsurance perspectives

Tim Williams

October 16th 2019

Overview of Robotic Process Automation and broader Intelligent Automation1

2

3

Application across Insurance

Challenges in getting it right and how to get started

Overview of Robotics & Intelligent Automation01

Digital transformation requires re-thinking how business is done. In this dynamic world, intelligent automation plays a critical role.

WHY?Customer expectations are changing dramatically

HOW?Transforming the business is grounded in the customer journey

WHAT?Intelligent automation is a major enabler of competitive advantage

Automation in insurance is at an inflection point, with high potential value for those that “get it right”

Trends across insurance Common conversations

Exponential growth of interest and technologies in

automation

Help us organize and activate our data to support

more effective and efficient decision-making

Belief increasing in practical application and value of

automation

Help us leverage digital workers to unlock

increased value from our human resources

Organizations struggling with poor delivery, where to

get good return on investment and how to scale

Help us apply robotic and artificial intelligence

technologies to contain cost, improve satisfaction

and support growth

Confusion stemming from various automation

techniques and market hype

How do we manage risk differently amidst

accelerated automation?

Several different technologies exist across the automation spectrum

Support humans

Elevate humans

Act like a human

See like a human

Learn like a human

Think like a human

Feel like a human

Traditional Application Automation

Robotic Process Automation

(RPA)

Business Process Management

(BPM)

Cognitive Intelligence

ArtificialIntelligence

• Strategic vendor or proprietary system implementation to address a broad scale business need

• Virtual workforce• Focus on performing

tasks across and process with multiple systems and functions

• Unattended operation

• A software to model and manage an end-to-end business process through workflow

• Improves task coordination and audit trail

• Ability to interpret and utilize unstructured data

• Pattern recognition• Machine learning• Recommendation

engines (next best action)

• Automated decisions

• Natural language processing

• Proactive actions• Ability to mimic

empathy/sympathy

Powering this transformation is a rapidly evolving automation landscapethat is fundamentally changing how work gets done.

Digitizing & Structuring Inputs

Task Orchestration, Execution & Assistance

Predicting Outcomes & Decision Making

Business intelligence / Reporting

Self-ServiceEnablement

BPM RPA

RDA

Advanced Analytics

Machine Learning

Deep Learning

Visualization

Data Aggregation

OCRVoice to Text

Image Recognition

NLP

Intelligent automation is the combination of automation techniques which digitize and structure data, process information and enable cognitive decision making to drive business outcomes. Vendors and tools are continuously evolving capabilities within and across these

automation techniques, but each technique has a distinct purpose.

Chatbot /Virtual

Assistant

Digital Forms

Virtual workers (robots) perform business tasks similar to users, handling complexity and volume

An enterprise-class software automation solution that runs unattended by people:

► Unwinds legacy of people-based quick fixes

► Performs laborious and repetitive tasks reliably

► Scales up and down to match peak loads

► Emulates business user behavior

► Shifts control directly to the business rather than coders

► Delivers ROI in weeks or months through a rapid, agile approach

Let’s see it in action…

SAP Bank reconciliation – for AR process

What are the benefits of RPA?

Low risk, low cost

extension of

existing technology

Reliability

Audit trail

Consistency

Right shoring

Retention

ROI

Cost savings or

avoidance

Ranging from

20-60% of baseline

FTE cost

Opportunity

focused

Accuracy

RPA often “fills the gaps” between existing systems

Scalability

Productivity

Applications across Insurance02

Several areas across insurance lend themselves well to being enabled by Intelligent Automation techniques and insurers are realizing value

• Policy admin• Claims processing• Billing, collections & premium

Top Focus

• Disbursements• Finance & actuarial• IT processes

• New business, underwriting• Service requests• Human capital and HR

High Potential

• Regulatory/Compliance• Internal Audit• Procurement

• Document handling• Email processing• Voice transcription

Shared Capabilities

• Image classification• Knowledge search

reduction in time processing queries and turn around

75-85%improvement in accuracy of claims related data

95%less cost per claim than those manually processed

75%

of workers do not believe automationwill put their jobs at risk

93%believe automationfrees them up to focus on more strategic tasks

88%prefer not doing routine maintenance and troubleshooting

36%

Of all enterprise processes likely have sub-routines that may be automated

85-90%Improvement in processing transparency, notifications and error handling

50-70%Shared services processes can be automated

15-40%

But, it’s not a silver bullet…when getting started with RPA, picking the right process is key

The process contains a

defined set of tasks

required for execution

Deterministic(Rule-Based)

The data required for the

process can be accessed

electronically

Digitized &

Structured(Electronic)

The process has a limited

number of exceptions; the

majority of the work

follows standardized paths

Standardized(Limited Exceptions)

RPA in Accounting & Finance

Treasury• Cash flow high volume

management• Collateral management/reports• Liquidity monitoring• Monthly analysis

Capital Management and Investment Accounting• Journal entry processing• Asset migration• Data capture

Policy, Controls, Governance and Compliance• Entity updates and master

accounts• Vendor and client on-boarding

General Accounting• Intercompany transfers • Reconciliations • Accruals• Month-end close heavy lifting• Journal entry processing• Bad Debt write-offs• Allocations and adjustments

RPA

Acctg & Finance

Procure to Pay• Data capture• Vendor and client on-boarding

Tax Planning and Accounting• Prepare tax returns and file

electronically• Tax workbooks including tax

schedules• Prepare tax provision by jurisdiction• Bridge provision, financial

statement data for tax compliance

Sample Finance RPA project examples

Finance focus Process Pre-RPA Post-RPA Benefits

General

Accounting

Accounting import for

local ledger accounting

► Process Time: 80 hours /

month (4 hours/day)

► No. of FTE involved: 2

► Quality Review Time: 30

minutes / day

► Process Time: 1 hour /

day

► No. of FTE involved: 1

► Quality Review Time: 10

mins / day

► 75% less processing

time

► Process re-design to

daily process (local

regulatory compliance)

General

Accounting

Intercompany transaction

matching

► Process Time: 66 hours /

month

► No. of FTE involved: 6

► Process Time: 6 hours /

month

► No. of FTE involved: 2

► 90% less processing

time

► Improved job

satisfaction

Financial &

External Reporting

Variance report

generation

► Process Time: 40 hours /

month

► No. of FTE involved: 3

► Quality Review Time: 3

hours / month

► Process Time: 100 mins /

month

► No. of FTE involved: 2

► Quality Review Time: 30

mins / month

► 95% decrease in

processing time

► Enhanced controls

ReconciliationsBilling system

reconciliation

► Process Time: 200

hours/month

► No. of FTE involved: 4

► Process Time: 20

hours/month

► No. of FTE involved: 2

► Increased reporting

accuracy

► Reconciliations

performed at a more

detailed level

RPA in Operations

Human Resources• New employee set-up and

onboarding communications• Applicant sourcing and processing

candidate • Employee data management

Call Centers• Initial customer contact and inquiry• Ongoing customer engagement &

follow-up• Eligibility checks and form

processing

Policy Administration• Policy Servicing• Endorsement processing• Policy change / endorsement

billing

Underwriting• New business submission• Producer onboarding /

appointment• Underwriting data collection

and aggregationRPA

Operations

Claims• Estimate processing• Vendor bulk invoice payments• Settlement • Quality assurance

Information Technology• Employee onboarding / contractor

onboarding for system access, etc.• Identity and Access Management• Legacy data conversions

RPA in Actuarial

Experience Monitoring & Analysis• Refresh mortality, morbidity, lapse,

utilization, and premium payments experience studies with established formats.

• Refresh studies more frequently and produce flash reports

Reporting & Analysis• Perform routine, manual

administrative processes such as monthly billing, claims settlement, death claims, and error checking

• Monitor performance of reinsurance deals

Model Conversion & Maintenance• Automated data conversion• Perform integration and

regression tests• Supporting independent re-

calculations/testing

Modeling & Forecasting• Updating inforce data and

populations• Validation and data integrity

checks• Reporting and analytics RPA

Actuarial

Product Development & Pricing• Perform routine market review

and rate setting processes

Valuation• Facilitate quarterly valuation,

which includes automated "wrapper" processes (i.e. extract data from admin system, perform initial runs") and manual processes

Getting it right and how to get started03

Top 10 lessons learned during our intelligent automation experiences

Automation efforts should be business-led and

owned, and IT enabled1Develop a business case for each process,

with targets and accountability developed and

communicated up front2

Do not underestimate what happens after

processes have been automated3Early on, consider whether you are automating

a series of independent, unrelated tasks or

creating an end-to-end comprehensive change

management program. Plan accordingly

4

Understand which automation tool is the right

one to use for a given process so that you

avoid targeting inappropriate candidates5 Be mindful to use an appropriate delivery

methodology.6

Be efficient in architecting your solution. Avoid

automating sub processes that will derail your

business case7

Work closely with IT. The success of the

automation program depends on coordinating

with IT on infrastructure and application

upgrades and patch schedules

8Don’t assume that any one automation tool

alone can replace the efforts of a person.

Meaningful ROI may require more than one

automation tool

9Don’t assume that the skills needed for a PoC

are good enough for production automation –

Production applications are typically much

more complex.

10

Addressing the pitfalls

► Strong Business & IT partnership

► Rigorous governance across the automation lifecycle, including ongoing production management

► Skilled and empowered resources

► Segregation of benefits tracking for cost-reduction, propositional change, and compliance

► Tightly manage capacity release, to ensure savings are realized

► Leverage existing enterprise process taxonomies and standards

► Develop framework for RPA testing and deployment

► Clear communication of RPA value at all levels

► Effective change management tools and deployment methods to secure commitment to success

Stakeholder engagement

Process prioritization Operating model Benefits realization

The keys to delivering tangible results fast

Way Forward…Companies typically start with an RPA Pilot and go on to build scale

• Start with Pilot process• Start Process identification

process to build pipeline• Layout the foundations for

Intelligent Automation Center of Excellence (CoE)

• Start awareness and education

• Develop a prioritized pipeline of use cases

• Consider automating a small number of simple and medium complexity processes

• Build internal capability for automation development and operations (CoE)

• Create roadmap of processes to automate

• Monitor and measure progress for long term sustainability

• Explore ML/AI options to improve business outcomes in addition to RPA

Crawl

Within 3 months

Walk

Within 3 -6 months

Run

Within 6-12 months

End-to-end automation continues to evolve across insurance adopters and is expanding to tackle more sophisticated tasks and processes

Head work,

judgment

based

Hand work,

rule based

Process automation Intelligent automation

Multiple systemscontaining data (structured and unstructured)

Simple decisions

Repetitive

Manual and error prone

Fixed process flow

Reasoning

Learning patterns

Perceptions and sentiments

Speech processing

Judgments

A relentless pursuit of automation is not the objective. Designing for the “human in the loop” helps ensure human interactions in moments that matter.

Holistic

The optimal approach considers the full-spectrum of

tools, technologies and methods from day one

Human-Centered

The optimal approach is engineered around the needs

of customers, employees, vendors, regulators, etc.

Design-led

The optimal approach solves a problem, starts with

context and outcomes, not platforms and data-sets

Pragmatic

The optimal approach weighs readiness, risks and

realistic views on value to set expectations

CORE PRINCIPLES

Click here for our thought leadership on Avoiding the Automation Trap

Thank you!

Tim WilliamsPrincipal, EY

Robotics & Intelligent Automation, Financial Services

980-263-0118

Tim.Williams@ey.com

EY | Assurance | Tax | Transactions | Advisory

About EY

EY is a global leader in assurance, tax, transaction and advisory

services. The insights and quality services we deliver help build trust

and confidence in the capital markets and in economies the world

over. We develop outstanding leaders who team to deliver on our

promises to all of our stakeholders. In so doing, we play a critical role

in building a better working world for our people, for our clients and

for our communities.

EY refers to the global organization, and may refer to one or more, of

the member firms of Ernst & Young Global Limited, each of which is a

separate legal entity. Ernst & Young Global Limited, a UK company

limited by guarantee, does not provide services to clients. For more

information about our organization, please visit ey.com.

© 2019 EYGM Limited.

All Rights Reserved.

EYG no. 00933-163GBL

BMC Agency

GA 0000_06282

ED None

This material has been prepared for general informational purposes only and is

not intended to be relied upon as accounting, tax, or other professional advice.

Please refer to your advisors for specific advice. The views of third parties set out

in this publication are not necessarily the views of the global EY organization or

its member firms. Moreover, they should be seen in the context of the time they

were made.

ey.com/advisory

25