Economic Evaluation and Optimization of the Degree of Automation in Insurance Processes

Braunwarth, Kathrin Susanne; Kaiser, Matthias J.; Müller, Anna-Luisa

doi:10.1007/s12599-009-0088-6

Cited by 16 publications

(12 citation statements)

References 15 publications

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“…Automation of the underwriting process is more efficient in the pricing of risk as it is free from human influence and possible idiosyncrasies. Automation is a store, retrieve, run and execute operation which supports the management of a firm's cash flows (Braunwarth, Kaiser& Müller, 2010). A cost-cutting example of automation in the insurance industry is the automation of pay-out calculation at a Japanese insurance company, Fukoku Mutual Life Insurance, which involved the replacement of 34 employees by AI (The Guardian, 2017).…”

Section: Empirical Studiesmentioning

confidence: 99%

Information and Communication Technology in Nigeria Insurance Industry: Developments, Challenges and Prospects

Inyang¹

2021

jefms

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Insurance industry provides insurance protection/financial guarantee to the insuring public in a given economy say Nigeria. The existence of risk allowed impetus for the insurance industry. Firms, governments and households act in ways that mitigate the adverse effects of risks on their assets, operations and social responsibilities. Insurance contracts are among the risk management choices of the persons exposed to risks. In Nigeria, the insurance industry is not too popular and needs to build trust and confidence among the insuring public. Information and Communication technology innovations that are changing the manner of doing things have potentials of facilitating, boasting trust and keeping insurance industry relevant. These can be realized via efficient insurance service delivery and innovations. This study using scooping approach aims at examining the level of information and communication technology (ICT) applications in Nigeria insurance industry, and promoting the ICTs in the industry. The study while identifying favourable demography and sustained innovations in ICT in Nigeria recommends sustained interest of the stakeholders towards adoption of ICT in Nigeria insurance industry.

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Section: Empirical Studiesmentioning

confidence: 99%

Information and Communication Technology in Nigeria Insurance Industry: Developments, Challenges and Prospects

Inyang¹

2021

jefms

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Section: Requirements For a Decision Model That Considers Automation mentioning

confidence: 99%

“…Balasubramanian & Gupta, 2005). However, the recent literature describes the relevance of considering the relationship between automation and sourcing (Braunwarth, Kaiser, & Müller, 2010) because automation in a first step influences the characteristics and manageability of the business processes. For instance, automating part or all of a process may change the interfaces between process steps.…”

Section: Requirements For a Decision Model That Considers Automation mentioning

confidence: 99%

“…These starting points were considered to be of high importance by several authors (Braunwarth, Kaiser, & Müller, 2010;Dibbern, Winkler, & Heinzl, 2008;Carmel & Tija, 2005;Cusumano, MacCormack, Kemerer, & Crandall, 2003), and as we will see in the following chapter, they have not yet been subjected to this type of quantitative research.…”

Section: Requirements For a Decision Model That Considers Automation mentioning

confidence: 99%

“…Therefore, with increasing levels of automation, the average complexity of the manual process steps increases, which again influences the optimal degree of relocation. Thus, the decisions on automation and sourcing of a process should be integrated (Braunwarth, Kaiser, & Müller, 2010 RM 2: By increasing the degree of automation, the costs increase exponentially.Manual process execution is primarily characterized by variable costs, and selecting the country or the general site where the process should be performed is a crucial success factor (Yang, Kim, Nam, & Wim, 2007;Dibbern, Winkler, & Heinzl, 2008). In the literature, numerous articles on the criteria and the factors that drive relocation decisions have been published (Farrell, 2005;Quélin & Duhamel, 2003).…”

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Interdependencies between automation and sourcing of business processes

Katzmarzik¹,

Henneberger

Buhl

2012

Journal of Decision Systems

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Automating business processes or relocating the processes to low-wage countries are two frequently used measures to decrease cost. With the main focus on cost reduction, however, productivity differences between locations as well as interdependencies between automation and sourcing are often inadequately considered. In fact, automation and sourcing opportunities are usually evaluated independently of each other. This common practice can systematically lead to decisions that consume expected savings. In this paper, a decision model is proposed that is designed to simultaneously derive optimal degrees of automation and relocation for business processes. Our approach considers various process execution costs and productivity levels as well as the effects of business process automation on sourcing decisions in order to maxime the return of a firm. We find that a false decision on the extent of automation may have significant influence on return. Furthermore, in the case of higher complexity, retaining work at the high-wage site becomes more attractive. Finally, we find that staff fluctuation at low-wage sites may not necessarily reduce attractiveness of such sites in general. This research helps executives to better understand the influence certain parameters may have on joint automation and sourcing decisions. INTRODUCTIONIncreased competition and economic pressure forces global companies to reduce business process execution costs. Two frequently used measures to achieve this goal are automation and sourcing. On the one hand, advances in information technology facilitate business process automation to increase efficiency (Miller & Parkhe, 1999;Parkhe & Miller, 2002). On the other hand, enabled by globalization, processes can be sourced entirely or partially to foreign countries to exploit wage differences. This is accomplished either by outsourcing the business processes to external service providers that are located abroad or by shifting the processes internally from one site to another.Relocating business processes, whether in-house or through outsourcing, has become very attractive in recent years and had been facilitated by improved communication technologies (Agrawal, Farrell, & Remes, 2003).In general, business processes dealing with information instead of physical goods are largely independent of the location and at the same time provide potential for automating at least part of the process. In these cases, automation and sourcing decisions are closely interrelated. For example, simple tasks in the financial services domain, such as entering paper orders into an order processing system, could be cost effective if they are performed by staff members in low-wage countries or if they are completely or partially automated. For example, optical character recognition (OCR) technologies can be used for the automatic scanning and processing of paper orders. Therefore, an integrated decision support model considering automation and sourcing is crucial.The objective of this paper is to analyze automation a...

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Value-Orientation in Business Process Management

Sonnenberg

2014

Handbook on Business Process Management 2

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Economic Evaluation and Optimization of the Degree of Automation in Insurance Processes

Cited by 16 publications

References 15 publications

Information and Communication Technology in Nigeria Insurance Industry: Developments, Challenges and Prospects

Information and Communication Technology in Nigeria Insurance Industry: Developments, Challenges and Prospects

Interdependencies between automation and sourcing of business processes

Value-Orientation in Business Process Management

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