Automation in the Insurance Industry - 2023 Survey Results

Introduction

Automation has become an integral innovation priority for insurance companies of all sizes looking to digitally transform operations, boost efficiency, enhance data insights, and improve customer experience. This comprehensive survey provides invaluable insights into the current landscape and future outlook for intelligent automation across the insurance sector.

The survey attracted responses from 47 insurers, comprising 24 large carriers over $1 billion in premiums along with a mix of midsize and smaller firms. This cross-section offers a representative snapshot of automation adoption trends across the market.

The results reveal widespread production implementation, with over 80% of insurers surveyed already leveraging automation in live systems. Underwriting, claims processing, and policy administration lead application areas, as carriers focus both first (and then most) on optimizing core processes through automation. Large insurers exhibit greater usage in supplementary functions like HR and finance compared to small companies that are still more focused on central workflows.

While adoption levels are high, most insurers classify themselves as still developing capabilities, pointing to significant headroom for maturity growth in both scale and sophistication. Many have 2-5 years’ experience, though 18 (38%) respondents have more than 5 years, demonstrating automation is not brand new yet best practices are still emerging.

Integration with legacy and existing IT systems poses a near universal challenge.

Clear benefits around improved efficiency, cost reduction, and enhanced data are being realized. Large carriers place greater emphasis on quantifying ROI, while small insurers take a more balanced scorecard approach. Microsoft Power Automate leads tools used given its accessibility, but UiPath and Pega have strong presence, especially among mature insurers. A hybrid model combining internal skills and external partnerships prevails as the most common implementation strategy.

Looking ahead, priorities like expanding automation across processes and incorporating AI/ML are consistent despite company size, though change management and training rank higher among less mature small firms. An overwhelming 92% expect to maintain or increase automation moving forward, seeing it as an integral ongoing capability, not a fading fad.

While large insurers push the envelope in scale and sophistication currently, smaller players are also dedicating increasing resources to automation as a key digital innovation priority now and for the foreseeable future. The survey highlights automation's vital strategic role across insurance and a universally bright future outlook.

The respondent base was fairly evenly divided between large insurers with over $1 billion in premiums (51%), and those below that threshold (49%), which was comprised of mid-size companies between $200M and $1B (28%), and smaller players under $200M (19%). This mix helps ensure the survey captures perspectives across the spectrum. For simplicity in this analysis, we will use two sizes: Greater than $1 billion in gross written premium, and less than $1 billion in gross written premium.

SURVEY RESULTS

Automation Implementation Status

Automation has secured a prominent foothold across insurance companies, with the vast majority having adopted the technology in some form. 81% of survey respondents indicated they now have automation implemented in production, speaking to the critical role it has come to play in operations.

Nearly half of insurers (47%) are aggressively deploying automation, reporting many projects already in production. This shows how a significant portion of the industry has moved (and is continuing to move) swiftly to integrate automation throughout their business processes.

34% are taking a more measured approach, with only ‘some’ implementations in production but beyond pilots or limited trials. Even companies that have not reached scale are possibly seeing value in targeted automation.

A total of 15% have not yet begun applying automation solutions, but most of these (all but 1) are considering or evaluating options. Of these, all but one is in the smaller group of respondents. The larger firms are pretty well on their way to implementing automation solutions.

Larger companies show a slightly higher percentage of "Yes, with many in production" (50%) compared to smaller companies (41%). Smaller companies have a higher percentage that are "considering implementation" (23%) compared to larger companies (4.2%), mostly due to the fact that all but 1 of the larger companies have implemented some form of automation.

Overall, the responses demonstrate automation is firmly positioned as a vital operational investment across insurance companies of all sizes and maturity levels. There seems to be a clear consensus it is a required capability for both improving performance and remaining competitive.

Automation Experience

The survey illustrates that automation is not an emerging trend in the insurance industry - significant expertise already exists among most adopters. 86% of those that have implemented automation have over 2 years’ experience (38% have over 5; 40% have 2-5). Just 13% are newer to automation with only 1-2 years’ experience.

The vast majority have moved (or are moving) well beyond initial pilots and are mastering foundational skills to (at a minimum begin to) leverage automation to its full potential. They are implementing automation with a long-term perspective.

Remarkably, none of the adopters fall into the less than 1 year category – it seems that the vast majority of implementers across the industry began their journeys over a year ago. The data points to a strategic commitment to driving transformational change versus brief experimentation.

When correlated with company size, larger insurers lead the pack - 92% of implementers have 2+ years experience and exhibit highly mature adoption overall. Their expertise has been built over many years.

For smaller carriers, 68% still have meaningful experience (greater than 2 years). 18% are newer to automation with less than 2 years. While reasonably mature in many smaller companies, larger carriers currently demonstrate more advanced organizational adoption (and associated capabilities).

Automation is firmly embedded across the industry as a whole. Insurers recognize its transformative value proposition and are committed to accumulating expertise over the long-term, not just piloting briefly. Larger firms are pushing the envelope, but adoption levels are significant in companies of all sizes.

First Automation vs. Most Automation

The most common starting point for automation was underwriting, at 26%, as insurers focused first on automating risk assessment. Customer service and claims were secondary initial areas at 16% and 14% adoption respectively.

So while insurers took an experimental approach piloting automation across different functions, underwriting received the most attention early on. While support processes like finance and HR possibly provided viable and lower risk starting points, they had a lower priority.

As companies grew their automation efforts, underwriting remained the top area (47%), that focus shifted to large-scale adoption concentrated in other core areas like claims (44%), customer service (35%), and policy administration (33%). This demonstrates targeted scaling of automation for central workflows after proving value. (Note: up to 3 selections were allowed for ‘Most Automation’)

Support functions continue lagging with 9% or less adoption. Insurers are strategically prioritizing transforming key processes via automation over optimizing supplementary areas. One main exception is Data Management and Analytics. Only 2% of organizations started in this area, but 23% cited it as one of the areas that had received the most automation.

As capabilities mature the data reveals an evolution from initial underwriting focus and experimentation, to targeted adoption in the most crucial insurance processes to drive competitiveness.

Initially, smaller insurance companies seem to have a concentrated focus on Underwriting, and Customer Service vs. larger companies that have an initial focus on Claims and Underwriting. Once underway, both large and small have diversified efforts across Underwriting, Customer Service, and Claims Processing.

Larger carriers also focus on automating Fraud Detection Risk Management, and Sales and Distribution. Smaller have a large focus on Data and Analytics automation (32% vs. 13%) than their larger peers.

While larger companies exhibit a more diversified focus, and while they too engage in Underwriting and Customer Service automations, they extend their automation operations into specialized areas like Actuarial Analysis, Risk Management, and Finance & Accounting. This indicates that larger companies have the resources to venture into more specialized and analytical domains.

Interestingly, Innovation & Digital Transformation appears in both smaller and larger carriers but is much more prevalent in smaller companies (21% vs. 4%). This might suggest that smaller companies are keen on leveraging technology to gain a competitive edge.

Automation Maturity Level : Organizational Adoption and Complexity

Organizational Adoption

For Organizational Adoption levels, the following definitions were used:

1) Initial: No Automation implementation or only experimental pilots

2) Developing: Some Automation projects in production, limited in scope

3) Defined: Established Automation processes, governance, and strategy

4) Managed: Scaling Automation across the organization, continuous improvement

5) Optimized: Advanced Automation?capabilities, integrated with other technologies.

The data provides a valuable snapshot of where organizations currently stand in their automation journeys. From those taking their first tentative steps to those that have achieved a sophisticated level of automation maturity, the landscape is diverse. The majority are in the "Developing" stage, indicating that while automation is widely acknowledged as necessary, most companies are still figuring out how to implement it effectively. As organizations strive for greater efficiency and competitiveness, the journey toward higher levels of automation maturity is both a challenge and an opportunity.

As insurance organizations embark on their automation journeys, a noticeable segment remains at the starting line. Specifically, 11% of companies in the survey are at the "Initial" stage, where automation is either absent or limited to experimental pilots. These companies represent the foundational layer of our automation pyramid, suggesting that for some, the journey is just beginning.

The most populated tier in the automation maturity landscape is the "Developing" stage. A total of 40% of companies find themselves in this category, where some automation projects have been put into production, albeit with a limited scope. This suggests that for the majority of organizations, automation has moved beyond mere experimentation and into real-world application. However, the limited scope of these projects indicates that there's room for expansion and improvement.

The next layer comprises companies at the "Defined" stage, totaling 19% of carriers. These organizations have not only launched automation projects but have also established formal processes, governance, and strategy around them. This stage represents a significant milestone in automation maturity, where companies have moved from ad-hoc projects to a more systematic approach.

26% of companies self-reported to be at the "Managed" stage. Companies here are scaling automation across the organization and are involved in continuous improvement efforts. This indicates a level of maturity where automation is no longer a 'project' but an integral part of operational excellence.

Finally, we have the "Optimized" stage. Here, only 4% of surveyed companies have achieved this level of maturity, characterized by advanced automation capabilities that are integrated with other technologies. These organizations are likely leveraging automation not just for operational efficiency but also for strategic advantage.

Smaller companies appear to be more agile in establishing automation processes but less capable of scaling them. In contrast, larger companies are robust in scaling automation but might face complexities in the initial and developing stages. Smaller companies are more likely to be in the "Initial" stage of automation. This suggests that they're still dipping their toes into the automation waters, either with no established implementation or just a few experimental pilots.

The "Developing" stage serves as a critical milestone for both smaller and larger companies. This stage is defined by having some automation projects in production, although these are usually limited in scope. Interestingly, larger companies are more likely to be at this stage (46% vs. 36%). This could be due to the complexities of scaling automation projects in larger organizations, or it could indicate a heightened focus on automation as a strategic initiative.

The "Defined" stage, characterized by established automation processes, governance, and strategy, is more commonly seen among smaller companies (surprisingly?) (27% vs. 13%). This suggests that these companies have been successful in formalizing their approach to automation, possibly because they are more agile and less encumbered by legacy systems and processes.

When it comes to scaling automation across different departments and continuously improving these processes—the hallmarks of the "Managed" stage—larger companies take the lead (29% vs. 18%). Their resources and organizational capabilities may give them the upper hand in implementing automation at scale.

The "Optimized" stage, featuring advanced automation capabilities integrated with other technologies, is the top level of automation maturity. Notably, this stage is exclusively occupied by (a small number of) larger companies. This might imply that reaching this level requires the kind of resources and technological infrastructure that only larger companies typically possess.

Complexity

For Automation Complexity, the following definitions were used:

1) Basic: Automation of simple, repetitive tasks with rule-based decision-making, such as data entry, form filling, and basic data extraction from structured sources.

2) Developing: Automation of more complex tasks that involve multi-step processes, multiple software applications, or basic exception handling.

3) Proficient: Automation of processes with improved exception handling, conditional logic, and integration with other systems using APIs or other methods.

4) Advanced: Incorporation of AI and ML technologies into automation, enabling some processing of unstructured data, natural language understanding, and basic decision-making based on data analysis.

5) Expert: Advanced integration of AI and ML technologies, allowing for adaptive learning, complex decision-making, and automation of tasks that require human-like understanding or judgment.

?The survey paints a picture of a sector largely in the early and middle stages of automation adoption. However, a substantial number of companies are advancing toward higher levels of automation complexity, signaling the industry’s evolving maturity and setting the stage for future growth.

Starting at the foundational level, 19% of surveyed companies fall into the "Basic" category. These organizations are in the initial phase of their automation journey, focusing primarily on rule-based, repetitive tasks such as data entry and form-filling. While this represents a crucial first step, it's evident that these companies have significant ground to cover to achieve higher levels of automation maturity.

Moving up the complexity ladder, the "Developing" stage houses the majority of companies, accounting for 45% of respondents. These organizations have graduated from basic tasks to tackle more complex, multi-step processes. They have started integrating multiple software applications and are in the early stages of handling exceptions. This group signifies a sector in active transition but not yet at a point of maturity.

Next, we have the "Proficient" companies, making up 17% of the survey population. Organizations in this category have made notable strides in automation complexity. They have implemented improved exception handling and conditional logic, and are also utilizing APIs for system integrations. This suggests a level of maturity that goes beyond isolated projects to a more organization-wide approach.

Also accounting for 17% of companies are those in the "Advanced" stage. These organizations have begun to move into the realm of Artificial Intelligence and Machine Learning. They are capable of processing unstructured data, have some degree of natural language understanding, and are beginning to use data analytics for decision-making. This cohort is pushing the boundaries of what is currently possible in automation.

Finally, at the pinnacle of automation complexity, we find a (very) small (and self-reported) 2% of companies in the "Expert" stage. These are the industry frontrunners, with advanced AI and ML integrations that allow for adaptive learning and complex decision-making. They represent the gold standard and point the way forward for the sector.

Automation complexity shows varied trends when comparing smaller and larger companies.

Both smaller and larger companies are in the thick of their automation journey, most notably in the "Developing" stage. However, larger companies show a higher propensity towards advanced stages of automation, including a very small number in the "Expert" level. Conversely, smaller companies are more likely to be in the "Basic" stage, indicating room for growth and development in their automation strategies.

Smaller companies have a more substantial representation in the "Basic" stage, constituting about 27% of the group, compared to only 11% in larger companies. This could imply that smaller firms are at a relatively early phase in their automation complexity journey, primarily focusing on rule-based, repetitive tasks.

Both smaller and larger companies are most heavily concentrated in the "Developing" stage. This suggests that irrespective of size, a significant portion of companies are in the process of evolving their automation strategies to implement more complex solutions. They are moving beyond basic tasks and are in the midst of tackling multi-step processes and basic exception handling.

The "Proficient" stage is relatively equally represented in both groups (18% in smaller and 16% in larger companies). Larger companies have a higher percentage in the "Advanced" stage (21%) compared to smaller companies (14%).

Notably, the "Expert" stage is solely represented (self-reported) by larger companies, accounting for about 5% of this group. These are the organizations that have reached the highest level of automation sophistication, with advanced AI and ML capabilities enabling complex decision-making and adaptive learning.

Maturity Level: Adoption Vs. Complexity

In summary, the overall adoption maturity average (on the 5 point scale from Initial to Optimized as defined above) is 2.43 and the complexity average (5 point scale from Basic to Expert as above) is 2.39. Large insurers scored higher at 2.67 adoption and 2.58 complexity, while small insurers averaged 2.17 adoption and 2.18 complexity.

The ‘average’ large and small carriers, when comparing Adoption vs. Complexity for an overall positioning of Automation Maturity would fall in the lower left quadrant of the chart, as below.

If we think of the four quadrants represented above, we can identify 4 different levels of Automation maturity, as defined in the graph below. The ‘average’ organization, whether large and small would fall into the Initiators quadrant, as defined the OZ Automation Maturity Model. While there are carriers in the Adopters and Optimizers quadrants, very few, if any, are true innovators with both high cross-organizational adoption and high solution complexity.

Implementation Challenges

By far, the top automation implementation challenge highlighted in the survey was integration with existing systems, cited by 65% of respondents. This aligns with the complexity many insurers face in connecting new technologies (like automation) to legacy infrastructure.

The second most common challenge (at 33%) was budget constraints. The costs associated with automation solutions, training, and maintenance represent a hurdle for many companies.

Resistance to change also posed difficulty, with 30% listing it as a key challenge. Any major technology implementation faces adoption hurdles, underscoring the need for change management.

In fact, change management itself came in with 22% selecting this challenge, emphasizing that organizational issues are prevalent alongside technical ones.

Other notable challenges were scalability at 28% and lack of expertise at 26%. Identifying suitable processes came in at 15% of respondents. The former shows struggles with expanding automation, while the latter reflects challenges determining which workflows to automate.

Just 11% cited vendor selection, indicating most have found viable providers. Data privacy and security were cited by 9%, indicating potential legal and compliance risks. Regulatory compliance was also a minimal challenge, at 7%.

Measuring ROI surfaced at just 4%, reflecting that most organizations are able to measure ROI, or, rather, that most organizations view measurement as a much lower issue than most other issues.

Technical hurdles like systems integration and scale as well as budget issues are the top challenges. But resistance highlights that the human barriers are also considerable factors for insurance companies to manage.

While the main hurdles are technical and budgetary, the data reveals significant human and organizational challenges also exist. Insurers struggle with adoption resistance, change management, and struggle less with compliance and measuring results, although for some, they do pose issues. A holistic view encompassing all dimensions is required for overall success.

For smaller insurers, integration with existing systems was the dominant struggle, cited as the top challenge by 59% of respondents. Budget constraints followed as the second top challenge at 41%.

Meanwhile for larger carriers, 70% listed integration as the primary hurdle - a significantly higher portion. Resistance to change was a far second at 30% of selected challenges. Lack of Expertise and Budget Constraints followed as tied for third top challenges, at 26% of responses.

Scalability also represented a greater struggle proportionally for 36% of smaller companies versus 22% of larger firms.

Organizational change barriers expand significantly as insurance companies grow in size and move to scale automation. Larger firms likely need more focused change management and training for automation success.

Note: up to 3 selections allowed for ‘Automation Challenges’

?Automation Benefits

Of those who have implemented Automation solutions, the top realized benefit from automation was overwhelmingly increased efficiency, reported by 88% of insurers surveyed. This major impact underscores automation’s power to optimize processes and workflows.

The second most commonly experienced benefit was cost reduction, cited by 41% of respondents. This further highlights automation’s value in driving tangible efficiency gains that lower expenses associated with manual processes.

The third major benefit was reduced errors, indicated by 37% of companies. By automating manual tasks, automation minimizes human error rates.

Better data quality and analytics followed at 32%, demonstrating automation’s ability to enhance how organizations gather and leverage data. Improved Customer Satisfaction, and Streamlined Underwriting were selected by 15% of insurers as benefits.

10% or fewer selected Employee Satisfaction, Agility and Adaptability, Faster Claims, or Enhanced fraud detection.

Increased efficiency, cost savings, error reduction, and data enhancement represent the primary benefits so far. But there are also signs of automation driving gains across customer service, employee experience, and agility as adoption reaches maturity.

Up to 3 selections allowed for ‘Automation Benefits’

For both large and small insurers, increased efficiency was overwhelmingly the top (and similar) benefit, cited by 90% of large firms and 84% of small companies. This universal benefit highlights automation's power to optimize processes.

Cost Savings, Better Data Quality and Analytics, Improved Customer Satisfaction, and Streamlined Underwriting were all selected by similar numbers of carriers, each within 1 or 2 percentage points between large and small companies.

Reduced errors were selected by 38% of large carriers and 32% of small carriers – again, similar levels for each.

The one notable exception is that no large companies reported Improved Employee Satisfaction and Reduced Workload as a benefit, a stark contrast to the 21% of small companies that did, suggesting that smaller firms may be better leveraging automation to enhance their employees' experience.

Up to 3 selections allowed for ‘Automation Benefits’

NOTE: I realized once the survey was complete that I had forgotten to add ‘Increased Revenue’ to the options for Benefits. I’m not sure how having that option would have altered the results, but I’m sure that at least some of the respondents would have chosen this as a benefit.

?Automation Tools Used

Automation technologies are enablers of digital transformation for insurance companies. The tools and platforms adopted provide key insights into how insurers are approaching and scaling their automation journeys.

Of the respondents that listed the Automation platforms their companies are using*, overall, Microsoft Power Automate leads adoption with 55% of insurers leveraging its low-code platform. UiPath follows at 26% as a top enterprise RPA vendor, with Pega at 16%. A wide range of ‘Other’ platforms are also in use (35% of those that listed what they were using), which included a number of ‘In-house’ solutions, the automation capabilities of their policy admin platform, or other vendors that received a single response.

Analyzing the automation tools data by company size shows some notable differences, however:

• Microsoft Power Automate leads adoption for both segments, but is used by 50% of large firms vs 35% of smaller companies.
• UiPath has 21% usage with large insurers compared to 13% with small. Pega has 13% large vs 9% small.
• Custom/proprietary solutions are more common for large insurers at 25% vs 9% small.
• Small companies have more respondents with no tools (or unknown to the respondents) at 22% vs 4% of large companies.

In summary, while Microsoft Power Automate leads overall, large insurers show higher adoption of the major enterprise platforms like UiPath and Pega. Smaller firms are more reliant solely on Power Automate.

Large companies also exhibit more custom development, while smaller insurers have a greater portion yet to adopt tools. This indicates large insurers have more resources to invest in custom solutions. Anecdotally, these seem to be largely the automation features in the insurers’ policy administration systems, like Guidewire. Which would seem to be more used by the larger insurers than the smaller.

So while Power Automate levels the playing field, there is a correlation between company size and adoption of full-scale automation platforms as well as custom development. Larger insurers demonstrate greater tool maturity overall.

*more than one selection / response was allowed

?Implementation Strategy

Overall there is diversity in how insurers assemble the appropriate resources and skills, whether internally, externally, or through partnerships, to deliver on their automation initiatives.

The hybrid approach was the most common strategy, used by half of respondents. This indicates many insurers leverage a combination of internal resources and external expertise as needed.

Only 14% relied solely on in-house skills to build automation solutions. While this does allow for more control and customization and in-house expertise, with the speed that these tools are moving this might not give insurers the outside views that may make for more successful future implementations.

14% fully outsourced automation delivery to vendors, leveraging external domain expertise.

16% are collaborating with specialist automation partners, showing the value of co-innovation.

Overall, 80% of insurers are working with outside vendors.

Analyzing by size reveals some differences:

The major difference found was that a larger percentage of large insurers take a hybrid approach (64%) compared to smaller companies (33%). This seems to indicate more large insurers are leveraging ?combinations of internal resources, external vendors, and specialist/platform partners.

On the other hand, smaller carriers are much more likely to outsource automation efforts to a vendor (24% vs. 5%) or to go to the other extreme and do it themselves (33% vs. 9%).

In summary, large insurers favor hybrid models much more heavily, while smaller firms either go it alone or have someone implement automation solutions for them.

Success Metrics

Monitoring performance and outcomes is key to demonstrating the value of automation and guiding initiatives. The survey asked insurers what metrics they use to measure automation success*.

In assessing the impact of automation, insurance companies are mainly measuring process efficiency, with 65% of all companies tracking this metric, indicating a strong industry emphasis on operational improvements. A substantial 56% of firms also evaluate the return on investment (ROI), underscoring the need to quantify the financial benefits of automation efforts.

30% of companies measure time savings. Customer satisfaction and error reduction are each tracked by 26% of companies, which suggests that enhancing customer experience and improving service quality are also important objectives. Additionally, 14% focus on cost avoidance, pointing to a significant consideration for both time management and financial efficiency within automation strategies.

When comparing the focus of smaller versus larger carriers, a distinct difference emerges, however. Large companies prioritize ROI, with 75% tracking this metric, reflecting a strategic focus on financial outcomes. They also track process efficiency (60%) and time savings (35%), indicating a tilt towards optimizing operations and resource allocation.

Smaller insurers demonstrate more of an operational focus, with a prominent 73% tracking process efficiency. ROI is only tracked 36% of the time, along with customer satisfaction (36%). This shows that small firms place equal importance on financial viability and the quality of customer engagement, but as secondary elements to efficiencies brought by automation.

The contrast indicates that large companies prioritize financial metrics, possibly due to greater resource availability for implementing automation, while small companies adopt a broader approach, balancing process, financial, and customer-related metrics. This suggests that as companies grow and automation strategies mature, the emphasis on ROI may become more pronounced.

*more than one selection / response was allowed

?Future Plans

Across all respondent companies, most are actively planning to enhance their automation capabilities. The most significant future plan, as noted by 59% of all companies, is to invest in more advanced technology, which indicates a strong commitment to staying at the forefront of technological advancements. Expansion of automation into additional business areas is on the agenda for 46% of firms, pointing to a recognition of the benefits of automation beyond current applications. The integration of artificial intelligence (AI) or machine learning (ML) is a priority for 41% of companies, showcasing an inclination towards more sophisticated, intelligent automation solutions. Nearly a third of companies (29%) are looking to train staff in automation technologies, reflecting an understanding of the importance of human capital in the effective deployment of these technologies. Fewer companies are considering establishing Centers of Excellence (CoE) or developing governance structures, with 7% and 10% respectively, suggesting that while important, these are not the primary focus at this time.

When comparing plans between small and large companies, it's clear that both segments share a similar focus on investing in advanced technology, with 60% of small companies and an equal 60% of large companies indicating this intention. However, large companies have a much greater intent to specifically integrate AI or ML in their automation solutions, with 65% of larger against 15% for smaller companies.? This suggests that larger firms may have more resources to pursue such advanced initiatives.

Both large and small carriers show similar commitments to fostering a culture of continuous improvement (35% versus 40% respectively) and to expand automation into additional business areas (50% against 45%). Training staff is a priority for 30% of small companies, which is significantly higher than the 5% of large companies, perhaps highlighting a greater need for skills development in smaller firms. Both small and large companies have a similar stance on collaborating with other companies and developing governance structures. Establish CoE is the least prioritized plan for both, reflecting a possible preference for more direct, impact-driven initiatives over formalized centers for excellence.

Growth Plans

As companies progress on their automation journeys, their future plans and outlooks provide valuable perspective on how this capability will evolve. When asked about future automation growth prospects, most insurers provided an optimistic viewpoint.

Among the insurers who indicated their future automation prospects, 100% plan to either sustain or expand implementation, demonstrating a positive outlook:

• 84% expect their usage will grow going forward, highlighting automation as an ongoing strategy.
• 16% think levels will stay the same, indicating plateauing at current maturity.
• 0% foresee decreasing automation, underscoring its entrenched position.

While more larger companies are looking to grow their automation efforts (90%) than smaller companies (76%), the future of automation growth is bullish, with the vast majority of insurers anticipating increased usage and integration over time. None expect any retraction of capabilities. The data shows automation is here to stay as a core digital innovation.

Expected Impact on Workforce

A common concern with emerging technologies like automation is their potential effect on job displacement and the workforce over time. Insurers provided their perspectives on how automation may alter staffing levels in the coming years.

With the integration of automation technologies, the insurance industry is poised for a reshaping of workforce dynamics over the next half-decade. The survey indicates that a substantial portion of companies, 40%, anticipate automation will not significantly alter their workforce size, suggesting that RPA and related technologies could be absorbed into the current structure without drastic changes in staff numbers. However, for some firms, automation is expected to streamline operations, as evidenced by the 23% predicting a slight reduction and 12% a significant reduction in their workforce, pointing to the potential displacement of routine jobs by RPA solutions. Conversely, a small segment of 2% foresees an increase in workforce size, possibly due to the need for new roles in overseeing and integrating automation systems.

Differences in expectations emerge when comparing small and large companies. Smaller insurers show a tendency towards stability, with 45% not foreseeing any impactful changes in staffing levels due to automation, whereas 14% predict a more pronounced reduction, highlighting a potential pivot towards leveraging technology for operational efficiency. In contrast, large insurance companies exhibit a more active stance, with 5% anticipating growth in staff numbers, which may correlate with the scaling of automation technologies into new operational areas. Large firms also anticipate a more varied impact on staffing, with fairly equal proportions expecting slight increases, decreases, or stability in workforce size (30%, 25%, 30% respectively), signifying a varying adjustment of their human resources strategies in response to automation trends.

Who is Leading Automation

Automation requires diverse leadership and collaboration across business units to drive effective adoption. When asked who is spearheading their automation efforts, insurers highlighted a cross-functional approach.

IT departments play a crucial role in leading Automation efforts, evident in 44% of carriers, underlining the technical nature of such implementations. Executives are also at the forefront of leading these initiatives across all carriers, with 41% being involved in steering the automation direction. Operations and Innovation teams are active in 37% and 32% of carriers, repsectively, suggesting a focus on leveraging new technologies to drive change. The involvement of specific automation teams or Centers of Excellence (CoE) is noted in 17% of cases, while strategy teams and external consultants or vendors have less influence, indicated by 15% and 5% respectively.

When comparing the leadership in automation initiatives between small and large carriers, some contrasts are evident. In small carriers, executives are much more prominently involved in leading automation efforts with 57% leading the charge, compared to only 21% in large carriers. This may reflect the more hands-on approach of business leadership required in smaller organizations. IT's leadership is significant across both segments, but it's particularly notable in large carriers at 47%, compared to 38% in small carriers, possibly due to larger companies having more specialized IT resources. Large carriers are more likely to have a dedicated Automation Team/CoE, with 26% reporting their involvement against 10% in small carriers, suggesting that larger organizations may have more structured teams for managing automation. Conversely, small carriers show a higher tendency to work with external consultants or vendors, at 10%, which might be due to a need for external expertise. Strategy teams have a similar level of influence in both small and large carriers, showing that strategic planning for automation is uniformly important (or not?) regardless of company size.

FINAL THOUGHTS

The insights gleaned from this survey paint a vivid picture of an insurance industry in the midst of a significant digital transformation, driven largely by the integration of intelligent automation technologies. The key highlights suggest several crucial trends and future directions:

1. Strategic Integration of Automation: The widespread adoption of automation across insurers, regardless of their size, indicates a strategic shift towards digital transformation. This move is not just about technological adoption but also a fundamental rethinking of operations and customer engagement.
2. Balancing Efficiency with Innovation: Insurers are focusing on automation to enhance efficiency, particularly in core areas like underwriting, claims processing, and policy administration. However, there's a growing interest in leveraging these technologies for broader innovative applications, such as enhancing customer experience and data analytics.
3. Progressive Maturity and Complexity: While most insurers are still developing their automation capabilities, the progression towards more mature and complex applications is evident. Larger insurers are leading in terms of sophistication, but smaller firms are also making significant strides, particularly in leveraging automation for competitive advantage.
4. Overcoming Challenges for Broader Impact: Integration challenges with legacy systems, budget constraints, and organizational resistance are key hurdles. However, the benefits realized so far - improved efficiency, cost reduction, and enhanced data insights - are encouraging more insurers to overcome these barriers.
5. Future-Focused Automation Strategy: The industry's outlook on automation is decidedly future-focused. With plans to invest in advanced technologies, expand automation into new business areas, and integrate AI/ML capabilities, insurers are not only looking to sustain but significantly enhance their automation capabilities.
6. Human-Centric Approach: The survey also highlights the importance of a human-centric approach, both in terms of managing workforce impacts and ensuring successful adoption and integration of automation technologies.
7. Leadership and Collaboration: Successful automation initiatives are characterized by strong leadership, often with a cross-functional approach that includes IT, executive teams, and specialized automation groups. This collaborative approach is crucial for navigating the complexities of digital transformation in the insurance sector.

In conclusion, the survey reveals a critical juncture in the industry's journey towards digital transformation, with intelligent automation standing at its core. This transformation is not just a technological shift but a comprehensive reorientation of how insurance companies operate and engage with their customers. The widespread adoption of automation technologies across firms of varying sizes underscores a universal recognition of their strategic value - not merely as tools for operational efficiency but as drivers of innovation and competitive differentiation.

As the industry continues to evolve, it is becoming increasingly clear that the successful integration of automation technologies requires a multifaceted approach. This approach must balance the pursuit of operational efficiencies with the need to foster innovation, particularly in areas that directly impact customer experience and service delivery. The journey towards higher levels of automation maturity and complexity reflects an industry that is progressively recognizing and embracing the potential of these technologies.

The challenges highlighted in the survey - from integrating with legacy systems to managing budget constraints and overcoming organizational resistance - are significant. Yet, the benefits realized thus far, notably in terms of efficiency, cost savings, and data enhancement, are substantial motivators for insurers to continue their investment in automation technologies. This is evident in the forward-looking strategies of these companies, as they plan to not only maintain but expand and sophisticate their automation capabilities.

Moreover, the survey underscores the necessity of a human-centric approach in the automation journey. This involves addressing the potential impact on the workforce, ensuring the adoption of automation technologies enhances rather than detracts from the employee and customer experience, and developing strategies for change management and skill enhancement.

Leadership in this transformational era is crucial. Successful automation strategies often involve collaborative leadership across various functions, including IT, executive management, and specialized automation teams. This cross-functional collaboration is essential for navigating the complexities inherent in integrating new technologies into established systems and workflows.

In summary, the survey presents a comprehensive overview of the current state and future trajectory of automation in the insurance industry. It highlights a sector that is actively engaging with the challenges and opportunities presented by digital transformation, driven by a strategic commitment to leverage intelligent automation not just for short-term gains but as a long-term competitive asset. As insurers continue to navigate this evolving landscape, the industry seems poised to redefine itself, leveraging automation to enhance efficiency, foster innovation, and ultimately, deliver greater value to customers.

I am the SVP of Digital Strategy at OZ Digital Consulting . If you would like to discuss creating Automation solutions for the Insurance (or any other) industry, please contact me - that's what my team and I do for our clients.?

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