Why automation is the profitability lever you control

Maximising profitability is the aim of every insurance business, but getting there isn't always easy. Insurance is a complex market, with numerous factors constantly impacting growth and profitability, many of which are beyond your control. In recent years, insurance companies have faced claims inflation, a cost-of-living crisis, rising interest rates and a changing risk landscape, all of which can eat into bottom-line profits.

That's why, for insurers and MGAs, it's critical to focus on the factors you have the power to change, to minimise unnecessary overheads and losses while maximising growth where it counts. In today's world, one of the fastest ways to do that is through automating systems and processes, which is proven to boost efficiency, augment human capabilities and enable product and service innovation.

Unsure how you can improve your insurance operations and drive ROI through automation? In this guide, we'll outline 10 strategies for leveraging automation to boost insurance profitability, with some real-life examples.

Scaling an insurance business used to involve hiring more underwriters to handle a larger volume of business, but automation has changed that. Now, insurance businesses can take on more customers without impacting the quality of products and services, because automation tools can handle the heavy lifting.

The risk landscape is constantly evolving and those insurers and MGAs that can build new products fastest gain access to profitable new customer segments, while diversifying and building greater resilience within their product portfolios.

Developing, building and testing new insurance products using offline, legacy tools can be hugely time-consuming. In contrast, the latest software can automate most of the process and speed it up significantly. With low-code solutions, products can be launched without writing code or involving developers, meaning the product structure, workflow, data requirements and forms can be set up in weeks rather than months. As a result, businesses can respond to customer trends faster, while reducing costs and the risk involved in launching a new product, all of which combine to drive healthier profits.

Effective pricing is critical to building a profitable insurance business. Price too high and you'll lose customers to the competition, but price too low and you won't effectively cover your overheads and any claims.

Automation is a game-changer for pricing, removing swathes of manual analysis and testing from the process. Implementing joined-up insurance software increases the volume of internal and external data available to underwriters, spanning claims, public databases, parametric and telematics data and beyond, which enables businesses to develop optimal, real-time pricing. Automation also allows businesses to process and analyse data much faster through algorithms and predictive analytics. This ensures a healthy balance between offering the best price to the customer and retaining your profit margins.

OneClickCover has built its business on analysing more data than the competition, to price its products as accurately as possible. However, it needed a powerful rating engine to ensure it could maximise that data:

Distribution is a substantial cost to insurance businesses, so minimising the friction involved can significantly benefit the bottom line. Automation facilitates distribution in numerous ways: enabling intuitive online quote forms for customers, integrating third-party data sources for ease of form filling and allowing companies to set up embedded insurance partnerships to reach new markets. And for those selling via intermediaries, broker portals streamline the sales lifecycle significantly, by providing information and tools, plus automatic quote generation for straightforward policies.

This is a huge benefit to brokers:

Claims leakage is one of the biggest areas of loss for MGAs and insurance companies, which can seriously impact profits if not addressed. Experts estimate that between 5% and 10% of claims payments can be classed as leakage, caused by either inefficient processes, meaning claims take too long to process, or insufficient data, so too much is paid out. Both these issues can be avoided by automating claims.

Cutting-edge claims systems offer a range of functionality to streamline the process, including self-service portals and integration with a huge array of data to assess and price losses. Many also boast artificial intelligence (AI), machine learning (ML) and natural language processing (NLP) functionality, like Nora, Insly's AI platform, which automatically assess simple claims through analysing photographic and documentary evidence. These combine to improve the accuracy of claims calculations and the speed of settlement.

The Association of British Insurers (ABI) reported that £1.16 billion of fraudulent claims were detected in 2024, up 2% on 2023, with insurers uncovering more than 98,400 fraud-related claims. At an average value of around £11,800 per claim, this can be a huge drain on profits. And the threat is only growing: Aviva alone detected a record £233 million of suspected claims fraud in 2025, equivalent to more than £638,000 every day.

Manual analysis of insurance applications and claims for fraud is time-consuming. Automation enables businesses to bypass much of the legwork, by collating and streamlining data collection and drawing on third-party data sources to cross-reference claims and applications. Advanced analytics and machine learning tools can also spot anomalies in customer behaviour and assess supporting documents for authenticity. Suspected fraud can then be investigated more fully by insurance professionals.

Insurance companies have highly complex finance, accounting and reporting requirements, which can be a drain on company resources if not managed effectively. Automation of tasks including invoicing, receiving premium payments, paying carriers and generating reports reduces the need for multiple support staff, freeing up team members for more strategic activities and improving efficiency and accuracy.

Automating finance and accounting can significantly reduce the number of support staff needed to handle data entry. It also improves the speed and accuracy of financial reporting, providing greater visibility over organisational performance. This enables better cash management and financial planning, both of which can be critical to driving profitability, by highlighting where costs can be cut and enabling management to make more informed decisions about pricing, investments and risk management.

Managing compliance costs insurance firms thousands of pounds in resources, potentially pulling employees away from profit-making activities such as underwriting and new product development. However, the cost of overlooking compliance can be significant, with fines and reputational damage for those who fail to follow frameworks such as the Consumer Duty Regulations, General Insurance Pricing Practices Regulations and Solvency II.

Thankfully, automation can now remove many of the headaches involved in staying compliant. Firstly, most insurance software is built to comply with regulations and updated to incorporate any rule changes. It also automates reporting, reducing the need for manual data entry, improving transparency and speeding up reporting processes. Finally, it encourages best practice through consistent data collection, customer communication and pricing.

By automating its operations, specialist MGA Alta Signa has seen big improvements in its reporting, so the team can automatically create documents such as settlement and claims bordereaux. IT & Operations Manager Alex Cuadros says automation has also benefitted content management, as all documents are now stored and searchable within the system, creating what Cuadros calls a "single source of truth", assisting both day-to-day operations and regulatory compliance.

It's easy to get fixated on new sales when looking to drive profitability, but equally important is building a loyal client base and encouraging existing customers to spend more. In fact, increasing wallet share usually requires less marketing spend than winning new business, making it potentially more lucrative.

Again, automation is your friend: boosting customer satisfaction, driving an improved understanding of customer behaviour through data and widening the channels through which brands can reach customers. With automated insurance systems, businesses can easily identify gaps in customer coverage, offer personalised products and discounts based on life events, automate renewals, or use behavioural analytics to devise tailored marketing strategies for specific customer segments.

Just a few months after going live with Insly's insurance software, Alta Signa saw significant improvements to the customer experience, including a faster underwriting and quote process, more efficient claims and greatly enhanced data management and reporting:

These kinds of improvements lead to happy customers, while joined-up data provides opportunities for cross-selling, upselling and targeting marketing and communications accordingly.

A large part of building a profitable insurance company is choosing the products where a business can differentiate itself in the market, while operating profitably, due to the right pricing, loss ratios and overheads. In the past, smaller insurance providers would often focus on writing larger policies, as the profit margin was potentially greater. However, automation has changed that, enabling specialist MGAs to write a high volume of small policies without requiring a large team of underwriters.

Insurance businesses are often put off automating their operations, due to concerns about cost, implementation and onboarding times, or a desire to retain the human touch in customer service. But, with the latest low-code tools, implementing insurance software is easy, fast and low-risk, flexible to your business needs. And most importantly, it could truly transform the performance of your business.

Insly can be up and running in a matter of weeks and is modular, so you can start small and expand the functionality as your business grows. An end-to-end system, it can be tailored to your business priorities, ensuring you retain the human touch where you need it.