AutoRek’s sales and relationship manager for insurance, Piers Williams, explores the growing trend of back office automation within the insurance industry
The insurance industry portrays a very traditional image, with many regarding it as being resistant to embracing technological innovation.
Over the past few years, however, we have seen new tech-driven firms making waves in the industry. Established organisations are now pursuing digital strategies to stay ahead.
While automation within the industry is a growing trend, the level of automation across middle and back office functions varies significantly from firm to firm.
To investigate this topic further, AutoRek conducted a series of surveys with UK insurance professionals, to find out how many firms are serious about automating their reconciliation processes – and how many are at risk of falling behind.
Here are five eye-opening findings.
1. No firms use fully manual processes
It is incredibly promising that none of the firms surveyed said they are using entirely manual reconciliation processes.
However, we still have some concerns because more than 60% of firms have automated only part of their processes.
Firms must understand that even partially manual systems will still result in inefficiencies.
2. Some firms continue wasting talent on repetitive financial control tasks
Given that few insurers (13%) have achieved total automation for their reconciliation process, it is unsurprising that 20% of firms have at least 20 employees working on their reconciliations.
This figure shows that, as reconciliations become increasingly complex, firms without a dedicated solution are assigning more headcount to support processes.
Driving higher levels of automation would free up many key team members from tedious manual tasks, so they could instead focus on value-added jobs.
3. The future looks bright
While the uptake of technology is still slower in insurance than other financial sectors, 60% of respondents said they have plans to start automating or further automate reconciliation processes within the next three years.
The remaining 40% said they are unsure what automation plans they have in place.
Crucially, there aren’t any insurers that have a total lack of automation objectives. From our perspective, it is a positive sign that organisations acknowledge – and plan to address – the looming automation gap.
4. Reconciliations are becoming a bigger priority
Another really encouraging finding is that reconciliations are more of a priority to insurers compared to five years ago.
Around 40% of firms have conducted reviews of their reconciliation efficiency in the past 12 months, while 20% have conducted reviews in the past three years.
We expect regular reviews of financial control functions to become more commonplace as firms assess how processes could be further optimised.
5. Time-saving is the number one priority
Two-thirds of respondents said time-saving is a key driver behind their automation objectives.
This is somewhat expected given that manual reconciliations can be incredibly time consuming - it can take an entire team around two hours just to reconcile one bordereau report, for example.
By contrast, automated tools like AutoRek can perform this function – from data upload and enrichment to matching and management information generation – in less than 90 seconds.
For AutoRek’s full report on automation in the insurance industry, click here.
