90% of insurers surveyed by WTW have said automation is key to solving the pressures placed on them by regulators.
Surveying 61 insurers across 17 countries, WTW said that the majority of respondents thought that cost management, a shortage in skilled resources, and improving governance and auditability, could be met with an increasing use of automation software.
Despite this, a number of firms still said they were cautious of the changes needed to implement new technology, naming transition cost, data, and IT policies, and technical challenges as the main barriers to adoption.
Mark Brown, global product leader for Life Financial Modelling at WTW, said: “Ever shortening deadlines and ever increasing workloads mean insurers are having to find new ways to maximise the benefits of their financial modelling programme.”
He added: “Instead of the more drastic option of hitting the ‘reset button’, the most effective route for most firms will be to keep and improve the best components of what they already have, replacing only where necessary, and building around them a stronger and faster process.”
The survey also revealed the need to increase frequency of reporting and outsourcing as the key areas for improvement that life insurers will be prioritising over the next two years.
According to WTW, this directly reflects a wider market trend of firms moving towards faster, simpler and more frequent interactions, enabled by better technology and richer data.
Meanwhile, the outsourcing of non-core activities continues to be driven by the long-standing need for insurers to build their digital capability, reduce complexity and overall cost base to support a more streamlined, sustainable and competitive operation.
This is not the first time that automation has been a subject brought up by WTW. In August, the firm released the results of another survey, this one suggesting that global life and property and casualty (P&C) insurers want to improve the efficiency and auditability of their processes and close the gap between their current use of automation and where they aspire to be in five years.
That survey questioned life and P&C insurers on how they use automation today in their valuation (life) and reserving (P&C) processes and where they aspire to use it in the future.
Most life companies said they currently use either ‘no automation’ or merely ‘some automation’ and conveyed that assumption processes were their least automated core areas of a valuation process, while data processes have seen the greatest investment to date.
P&C insurers echoed the same sentiments that they also currently use no or some automation and revealed that engagement with senior management was their least automated core area of the current reserving process, while data processes were the most automated function.