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Bermuda:Re+ILS Spring 2016

Robots are here to help: an innovative approach to automation in the insurance industry Robotic automation Just when you thought that recent change in the reinsurance industry has been beyond anything you could have imagined or expected, a new wave of innovation is now emerging that could transform the industry in even more fundamental ways. Robotic process automation has the potential to transform many elements of the industry’s operations, ranging from bordereaux processing to the movement of risk data between submissions slips, pricing tools and exposure management systems. Chris Maiato and Craig Russell from EY advisory services believe that the evolution of this type of software has the potential to revolutionise parts of the industry. “When re/insurance underwriters and actuaries sit down to review a fi nal contract proposal in the future, there is a good chance that the vast bulk of the administration of the submission, loading of models and setup of contract and exposure systems will have been completed by software robots. This is one of many examples of reinsurance processes that have the potential to be transformed by automation in the insurance and reinsurance industries,” Russell says. “A new class of robotic software is being used in the fi nancial services industry that can emulate a user, log into systems, process data and automate the various interactions across a reinsurer’s systems and tools,” says Maiato. The evolution of automation The manufacturing and automotive industries were the pioneers of automation. The use of robots has been an integral part of production assembly lines since the introduction of robotic tools and machines in the early 1960s. Robots, or a better term might be automated software tools, are now commonplace across almost all industries: automated teller machines have changed the role of bank staff, airport check-in is now often a fully automated process, huge warehouses are being run largely by robots, lawyers are using software to review documents for relevance to cases and online shopping orders can be placed and delivered with limited human involvement. 19 Spring 2016 Bermuda:Re/insurance+ILS Many will also have seen that Google’s self-drive cars have now amassed more than one million miles on the roads of California and Austin, Texas, and have the potential to make human drivers a thing of the past. Russell believes that in some sectors of the fi nancial services industry there has perhaps been less impact to date from robots and automation tools, although progress is being made with advancements in areas such as fi nancial technology, telemetrics and big data. “The shift of retail banks and insurers to digital channels has begun to change the size and role of customer service functions, as more transactions are completed on a self-service basis. But in the commercial insurance sector a large majority of skilled roles within fi nancial services companies, in research, analysis and fi nance teams, are just beginning to exploit robotics and automation,” he says. Russell explains that traditionally reinsurance activities have been diffi cult to support with automated tools because of the need to review and analyse a vast range of data sources that historically have often been diffi cult to access, unstructured and often on paper-based slips rather than digital. On top of this, reinsurance processes also often need to interconnect across many different systems and models, which has been a challenge for some automation tools. But things are changing. “The trends in digital, data and robotics tools are now removing these limitations and as a result fi nancial services companies are taking automation seriously,” Maiato says. He notes that the growth in digital across fi nancial services such as electronic data exchange between brokers and insurers and online customer and broker portals is changing the availability and access to digital data. What’s more, the new breed of robotic process automation tools, also known as a ‘software robot’, can emulate the various actions of a user and process data, without human intervention. These tools have been around for some time but in the last couple of years their capabilities have matured. A number of ‘real’ pilot case studies are live across the fi nancial services industry and there are specifi c examples of software robots being used in operations of re/insurance companies and brokers. “This new type of software robot tool has the potential to redefi ne the operations and processes of re/insurance companies by helping to automate a wide range of operational activities such as sorting through submissions IMAGES: TATIANA SHEPELEVA / SHUTTERSTOCK.COM


Bermuda:Re+ILS Spring 2016
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