Automation And Its Effect In The Insurance Sector

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Automation, known as virtualization, is the use of different systems to operate equipment, machinery, and software to complete a process with limited, reduced or no human interaction. From machine automation in factories and plants to software automation in businesses, such as automated ordering and accounts payable systems, the technology has wide implications for all aspects of human life.

As all industries move closer to accept automation, businesses will be able to devote more time and resources to core organizational goals.

Economic Impacts

Online Shopping and E-Commerce are now possible thanks to the automation of processes like warehouse robotics. Production automation has been in full force for decades, and non-automated processes are on their way out. Automated home appliances are already on the market, including refrigerators that know their contents and can order supplies for grocery delivery when stock runs low.

In the coming years, automated transportation systems will begin to arrive as more devices connect to the Internet of Things. Automated ordering systems in offices will automatically order supplies as needed, with little to no human interaction or monitoring.

Overall, automation will allow for a reduction in operational resources, but it will also impact employment in industries like restaurants, as many traditional jobs will no longer be available. Education will change to satisfy the needs of these new processes to avoid high unemployment numbers.

Insurance Industry Implications

Automation will create an impact on the insurance industry in a variety of ways. On the positive side, the technology will reduce the resources required to do business, particularly in the areas of policy checking, data entry and monitoring for supplies. The claims process will become quicker and more efficient as human oversight of the process will only be necessary for correcting inconsistencies and issues. The need for electronic data processing coverage will increase, presenting new sales and prospecting opportunities.

On the negative side, as unemployment rises alongside automation, workers comp premiums could also drop, reducing profits from this type of coverage. Collaboration between carriers, vendors, and agents will be necessary to stay on top of changing trends and processes.

Actions Needed To Be Taken

  • Educate yourself and your agency staff on automation and the current trends around it in your area. Ensure agency leadership and staff are aware of basic automation concepts and applications.
  • Review agency workflows to determine where you can leverage virtualized automation to provide instant and superior service to customers, both during business hours and after hours.
  • Review your current customer base for possible impacts. Educate your clients on the risks involved with automating processes.
  • Understand when payment and coverage points can be enacted for on-demand insurance.
  • Investigate markets for automation coverage, for both providers and consumers. Understand where your carriers stand on automation, as well as their offerings in this area.

Once automation is fully realized, it will lose its capacity to reduce the resources necessary for an organization to operate. But as automation increases, so does the importance of people who can provide thought leadership, code, advice and maintenance for the automated process. As automation grows, so does its risk for failure. Systems will rely on expert people to resolve issues as soon as they arise to keep automated businesses running.

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Introducing Inmediate: a platform on which customers, distributors and insurers using smart contracts connect. https://inmediate.io

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