Insurance firms will spend more than three times as much on automation in five years than they do today, according to an analysis by Juniper Research.
In a report published this week, the researchers predict that insurers’ spending on robotic process automation will increase from $184m (£148m) to $634m by 2024.
They also expect that 65% of insurance providers will have adopted the technology by that time, with North American and European companies leading the way.
These regions are likely to be most active due to saturated markets and flat premium growth, with automation offering an opportunity to cut costs and remain competitive.
‘Previous growth strategies using mergers and acquisitions in the highly saturated insurance market have resulted in disparate policies, practices and software,” Juniper Research said.
“Adopting robotic process automation solutions will appeal to insurers by enabling substantial cost and time savings, created by mitigating these disparities.”
The researchers said automation software could help insurers achieve regulatory compliance, meet demand for better services, modernise legacy systems and improve back-office efficiency.
They predict that it will leverage advances in artificial intelligence to offer increasingly sophisticated underwriting, claims management and data handling services.
Chatbots are expected to be key to this, with the technology continuing to improve in its ability to understand questions and answer them.
However, Juniper Research warned that chatbots are very inefficient when it comes to understanding context, while learning more than one language or regional variations are also challenges.
“Although automation can bring results in a few weeks, scalability can only be achieved when bots learn how to operate outside simulated environments,” research author, Maite Bezerra, said.
“Bots must be continuously trained to understand exceptions and non-linear processes, or companies risk being left with limited return on their automation investment.”
Insurance technology companies attracted $3bn (£2.4bn) of investment in the first half of 2019 worldwide, and are on track to receive a record $6bn by the end of the year.
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