Insurers are expected to drastically boost their spending on robotic process automation over the next five years as they seek to spur revenue growth by cutting costs, according to a new study from Juniper Research.
Robotic process automation, or RPA, is software designed to help reduce operational costs by automating basic repetitive tasks. Juniper said that insurers will likely spend $184 million on the technology in 2019, but that number should surge to $634 million by 2024, according to the firm’s prediction.
Juniper Research said that North America and Europe will lead RPA adoption over the next five years, with more than 65 percent of carriers adopting the technology by 2024. They’ll do so in order to cut operational costs and remain competitive as they counter flat premium growth, the study found.
One of the things the technology can combat: the results of previous growth strategies such as mergers and acquisitions, which have left “disparate policies, practices and software,” Juniper Research said. RPA products and services are poised to reduce costs and save time, helping to address some of these disparities, it noted.
Juniper Research predicts that average spending on RPA products and services will jump 30 percent over the next five years, as technology leverages AI advances to bring more sophisticated services in areas including underwriting, claims management and data handling.
Despite the benefits of RPA, research author Maite Bezerra cautioned that the addition of RPA technology will take some patience and planning.
“Although automation can bring results in a few weeks, scalability can only be achieved when bots ‘learn’ how to operate outside simulated environments,” Bezerra said in prepared remarks. “Bots must be continuously trained to understand exceptions and nonlinear processes, or companies risk being left with limited return on their RPA investment.”
The full report is “Robotic Process Automation in Telecoms & Insurance: Vendor Positioning, Strategies & Forecasts 2019-2024.
Source: Juniper Research