For any industry with a widening customer base, outsourcing is no longer an option but a necessity to ensure continued growth and sustainability in the long run. For the insurance industry, the growth over the past few years has been unprecedented and beyond expectations. However, the challenges and demands that accompany such developments make outsourcing a no-brainer for the industry players to drive performance, cut costs, and enhance the customer experience. Also, the rising curve has attracted new competition and as a consequence, the old players are pulling their socks up to retain their share of the market.
The insurance sector was among the first ones to realize the role that outsourcing insurance services for agencies can play in controlling the rising operating costs without compromising the service quality. Among the plethora of workflows characterizing any typical insurance agency, the back-office tasks are usually the ones with which businesses start their outsourcing engagement. Once the outsourcing wheels are in motion and positive results start appearing, the client gradually moves to the other aspects of the operations.
Major Challenges Insurance Agencies are Faced with Today
While navigating their way to growth and profitability, insurance agencies come across some serious challenges that must be acknowledged and addressed aptly to realize the best outcomes. It’s critical for insurers to be adequately prepared for these obstacles by empowering their workforce with the best tools and strategies. Here’s a list of a few of the major challenges facing the insurance industry today.
Harnessing the Huge Data Inflow
Like every industry operating in the competitive world, the insurance sector too relies heavily on relevant data to streamline operations, forecast trends, assess risks and opportunities, and boost the bottom line. A typical insurance firm is constantly bombarded with overwhelmingly large data streams that largely go unharnessed due to the lack of the right resources or will. If utilized smartly, this data can be the fuel that powers the growth engine of the organization. However, most insurers do not have the right resources to utilize this data as it requires technologies such as Data Analytics and Machine Learning that can be expensive to procure. Once this data is used smartly, processes such as underwriting and pricing can be made more accurate and result-yielding.
Streamlining and Automating Different Processes
As operations scale, insurance agencies find themselves in a desperate need to smoothen out their workflows to attain higher efficiency and reduce process complexity. However, the management is often forced to spend most of the working time in daily firefighting rather than strategizing the growth path of the organization. This leaves the decision-makers with little time to explore the latest technological possibilities that make such goals a reality. Identifying feasible ways to apply technology such as automation and artificial intelligence to combat operational challenges is another major concern of insurance agencies.
Cyber Threats
The sharp rise in the instances of cybercrimes is a serious problem for every industry including the insurance landscape. Undesirable events such as digital security breaches, loss and leakage of client information, and suspension of operations due to failures in the workflow setup of the company can give sleepless nights to the management. Also, insured individuals may want the insurer to bear their personal losses if they get impacted by data breaches. Other pain points include the cost and effort involved in notifying authorities and individuals about cyber threats; settlement costs; fines; costs of discovering the cause; loss of business, customers, and reputation; and cyber extortion.
High Overheads
A universal problem plaguing almost every sector in varying severity is the high operational expense. For the insurance sector that’s largely driven by high manual intervention in areas such as customer service, agent performance verification, claims management, finances, and others, shooting up of costs is common. But as margins get narrower, the prospects of maintaining a healthy bottom line in the near future look bleak until certain structural changes are introduced into the workflow.
How Outsourcing is a Winning Move for Insurance Agencies
The fact that insurance BPO services for agencies have mastered the art and science of handling complex insurance processes efficiently while cutting down on operating costs, draws insurance agencies towards outsourcing. As operations are executed flawlessly at less than half the usual costs, these third-party service providers are always the go-to solution for insurers. Some of the critical services that competent insurance BPO services for agencies offer are listed below.
Policy Checking
To avoid business loss, insurance companies must have a foolproof policy document review process in place to ensure that only claim forms with complete and accurate information are processed. External insurance services for agencies in USA can help insurers check policy details accurately against those of the proposal. Backend functions such as policy renewals and conflict reporting are also managed efficiently by the professionals employed by the insurance BPOs.
The reason most insurance agencies have a flawed policy checking process is their massive dependency on the manual and error-prone workflows. Other factors such as unskilled employees and agents, miscommunications, incomplete transactions, and the lack of standard operation procedures (SOPs) add substantially to the sharp rise in errors.
A reputed insurance BPO firm can be trusted to carry out the job satisfactorily since it uses the latest technology such as Artificial Intelligence and Machine Learning algorithms that reduce human involvement in the process. These experienced firms also possess digital tools for managing reconciliations, and verifying quotes, proposals, and policies to reduce TAT and increase cash flow.
Claims Administration
Besides bringing a bad name to the insurer, weak insurance claims administration can also cause loss of business and clients. The primary problem with a typical claims administration process is that it is complex and error-prone, involves extensive paperwork, and demands close coordination with external stakeholders. For small and mid-sized insurance companies, procuring the resources to meet the requirements of a perfect claims administration process can be overwhelming. On top of this, the frequently changing government regulations make it inconvenient for the internal teams to ensure complete adherence to the industry guidelines while meeting consumer expectations.
A prudent choice for insurance carriers would be to seek the services of a reliable third-party vendor that’s equipped with the latest tools and infrastructure for managing insurance claims. Such a vendor can redesign the entire claims management process with digitally structured data, intelligent claims analytics, and expert manpower to enable the client to deal even with the most complex cases.
A tech-enabled insurance BPO firm can help its clients to realize cost-effective and rapid closures of claims by automating the claims management process to transform its siloed models into more organized and cost-efficient ones. What makes such insurance services for agencies in USA the best bet for handling claims is the way they use digital technology for fraud detection, handling of bulk paperwork, and to facilitate an unhindered exchange of information between stakeholders.
Renewal Exposure Summary
Insurance renewal exposure summary is important for an accurate assessment of the risks of the policyholder to provide the right premium amount during a coverage renewal. It’s crucial to correctly assess the ever-changing risks of the person as a wrong assessment can lead to serious legal and monetary consequences. This is why most insurers opt for the able services of a trusty insurance firm for the end-to-end handling of their renewal exposure summary.
The vendor helps the client with a strategic and proactive approach to policy renewals and enables it to tackle the challenges of retaining clients. It can streamline and simplify the renewal process with the application of digital tools such as Deep Learning, Machine Learning, and Robotic Process Automation. The vendor can help the client with automated assessment control for accurate data validation, self-administration capabilities for smooth flow of information, interactive dashboards for reporting, and digital solutions to assist actuaries for accurate projections. The use of such technologies enables insurers to target different customer segments with targeted plans and pricing models.
Outsourcing is the Best Way Forward for Insurers in the Second Half of 2020
The ongoing Covid-19 pandemic has crippled the global economy and has left the insurance industry vulnerable to the after-effects of the crisis. Today, insurers are under immense pressure to implement drastic changes to their workflows in an attempt to recover from the blow of the pandemic. But this is only possible with the assistance of a reliable insurance services vendor that can ensure the continuation of operations for the rest of the year while also enabling the client to be better prepared for such calamities in the future. The following are a few ways in which outsourcing would help insurers for the rest of the year 2020 and beyond.
Experts at Work
The Covid-19 pandemic has forced insurers to operate with a skeleton staff with most employees working remotely from their homes. However, the complex nature of the insurance workflows makes it inconvenient for the employees to do an efficient job with their inefficient workstations. On the flipside, by delegating the most critical processes to an insurance BPO service provider, insurers can avail the services of highly trained and skilled resources equipped with the latest technology for solid back-office support. The vendor team can work remotely and establish and maintain unhindered information flow between different stakeholders to ensure that operations don’t suffer even with a decreased workforce.
Efficient Claims Management
Managing insurance claims is a tedious and resource-intensive task that demands special expertise for the desired outcomes. Insurance claims eligibility verification and claims processing are best handled by insurance BPO service providers who possess the know-how to streamline the workflow and the efforts of the internal teams. Competent insurance BPO companies for agencies deploy time-tested methodologies to ensure faster and error-free claims processing to help the client get back on its feet to see through the rest of this ‘not-so-great’ year. With their sophisticated tools and well-trained staff, insurance vendors give their clients a definite edge in the market to lead the competition for the rest of the year.
Regulatory Compliance
The insurance industry is characterized by stringent regulatory guidelines that force all players to abide by complex federal laws. As a consequence of the Covid-19 crisis, the industry has seen several revisions in the guidelines and that has made it challenging for the already resource-stretched insurance companies to keep updated with these changes. Reliable insurance BPO services firms always keep their databases updated and their staff trained so that adhering to the regulations is much easier for the client.
Besides the aforementioned advantages, insurance BPO companies for agencies can help their clients navigate industry obstacles and market challenges effectively and efficiently. With reliable insurance back office services for agencies by their side, the clients can devise and implement better risk management strategies to fend off cyber threats and monetary loss. Such a vendor can help its clients to accurately forecast upcoming market trends and guide them on profitably scaling their operations. They can use modern data-driven tools to create future-ready business models that would enable insurers to serve their customers better and realize an attractive bottom-line.
Why Choose Insurance BackOffice Pro?
A well-known name in the US insurance landscape, we have helped a plethora of clients to ensure smooth operations with a variety of quick and accurate insurance services at affordable rates. Our AI, Ml, and Analytics expertise and our highly-trained professionals help us deliver first-rate insurance back office services for agencies across the country. We help insurers to cut down on their operating costs by streamlining processes such as claims administration, policy checking, loss run processing, and others. Our clients prefer us over others for our flexible service models that help them scale faster and respond better to changing market conditions. We help them mitigate business risks, reduce indemnity spends, and enhance the end-customer experience to transform them into future-ready insurance companies.
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