Why automation in P&C creates the need for more human experts – Digital Insurance

The P&C industry has been on an automation path for many years. When the pandemic hit, it became a catalyst for accelerating automation and digital transformation. Straight-through processing, self-service portals, virtual inspections, and digital payments are just a few of the areas that insurers put a sharper focus on. But automating tasks and workflows does not mean that machines will take over and leave industry professionals out in the cold.

In fact, the opposite may be true. I believe that a case can be made that automation initiatives will increase the need for skilled professionals with deep industry domain knowledge.

All the automation occurring is good for the industry. And anyone who knows me knows that I am certainly not a luddite or anti-technology when it comes to progress. However, I believe there is one dimension of tech progress in the P&C industry that is being overlooked skilled individuals. Ive written extensively about how automation and AI will elevate the role of industry professionals and how relationships are still vital in the industry, especially in commercial lines.

But in this blog, I turn my attention to another implication of task automation the need to manage it. Several examples expose the challenges.

Over all of this, layer the complexities of the insurance business, the trend towards more specialization, and the evolving risk landscape: the picture gets even more complicated. The state-by-state regulation regime in the US, coupled with the variations by line, introduce multiple dimensions that must be managed for new tech solutions in automation. As customer risks become more complex (as in middle-market and large commercial accounts, specialty lines, and workers comp), the intricacies of the business create new challenges.

Automation and leveraging AI for insights are good for the P&C insurance industry. But there will still be a need for industry experts who understand how to execute tasks that are compliant with evolving regulations, who can exercise judgement based on experience, and who can manage all the automation activities. Some of that automation management will demand IT experts, but much of it requires an understanding of how business is conducted, the details of different customer segments and insurance products, and the requirements imposed by the many regulatory bodies involved.

Will there be increasing levels of STP, bots, and other automation in P&C? of course! But does this mean that the machines will be in control? I emphatically say no! People and their experience and expertise in the industry will remain at the heart of the business.

This blog entry has been reposted with permissionfrom SMA.

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Why automation in P&C creates the need for more human experts - Digital Insurance