High accuracy risk aggregation
Timely and accurate simulation of risk with the help of Robotic Process
Automation (RPA) for specialist insurance and reinsurance business
Process
The client is a long-established specialist insurance and reinsurance business, part of the Lloyds of London market. It underwrites a wide range of specialist Marine, Energy, Aero and liability classes of commercial insurance. A large part of the Lloyds market work is manual in nature with large binder files for specific insurance cases. Risk aggregation in underwriting of policies required to validate potential risks due to previously underwritten policies in the region. The process requires categorizing risks associated with underwriting policies with similar risks in the region. Existing tools available would simulate potential disasters and identifying the risk exposure. The tools itself were high cost and integration with them is time consuming.
Solution
Robotic Process Automation (RPA) was used as a tool to drive data into cloud-based Risk Aggregation tools and provide simulation of risk exposure. The exposure was then run through analytics using bots, and the final results were updated in the underwriting tool for underwriters to evaluate. There was no need to integrate with third party applications as the data was sourced with the help of RPA and used for simulation.
Challenges Addressed
Time consuming
Process was very manual in nature and hence was time consuming.
Higher costs
Integration with third party tools was expensive and limited data could be accessed.
Risk exposure
Proper categorization could only be collected from a single source and hence less accurate than gathering from multiple models.
Errors due to manual work
Manual errors could prove to be costly since the transactions are of high financial value.
High skill requirements
Each Line of business being underwriting had its own guidelines and policies hence training resources to understand the same was time intensive.
Outcome
- Reduction in manual effort by 70%.
- Higher accuracy in calculating risk exposure – results yet to be quantified.