Since its inception, the insurance sector has fundamentally been a people-driven affair. Manual workflows have dominated the scene and the use of technology is still in its infancy. But something unusual happened last year that forced insurers to break the status quo and evaluate the ecosystem from a fresh perspective. Among the multitude of challenges posed by the Covid-19 pandemic to insurers, the alarming shortage of employees badly hit people-intensive processes such as policy checking and administration, leading to massive business losses.
The crisis forced employees to remain indoors and take to digital means of managing critical processes such as checking insurance applications and collaborating with stakeholders for information verification. At present, albeit the pandemic seems to be abating and insurers planning a comeback in the market, processes such as policy checking continue to haunt them owing to the lack of adequate manpower to manage those.
| In 2020, digital adoption in the insurance industry went up by about 20% globally. |
How Inadequate Manpower is Impairing Insurance Policy Checking
Challenges in Virtual Collaboration
By definition, policy checking is the evaluation of policy papers to spot errors and inconsistencies in information. On identifying any such error, the documents are sent to the carrier for correction. The policy checker can also reach out to the policyholder or other third-parties for more clarification on the policy details. Tasks like these involve a high degree of in-person meetings, which policy checkers find difficult to execute using the virtual modes of communication owing to the lack of training and inadequate infrastructure.
| As per a survey, 47% of policyholders filed a property or auto insurance claim in 2020, and 39% of them used a mobile app, a web portal, email to send their claim. |
The Growing Risks of Fraud
The insurance sector has always been a favorite target of online scammers who are always after the crucial information about policyholders. The pandemic period witnessed an unprecedented rise in the instances of claims, a substantial portion of which was fraudulent. Furthermore, remote working has raised security concerns for insures due to the lack of adequate digital measures. All of these necessitate it for the policy checking members to be on their toes as they play a pivotal role in the identification of information security breaches and financial risks.
| Fraudulent claims total over $80 billion every year in the U.S. Property-casualty fraud costs the industry over $30 billion each year. |
Mounting Pressure on the Workforce Leading to Errors
Manually reviewing policy documents, ensuring that a policy matches with the proposal, assisting in policy renewals, reporting differences to carriers, and the like take a great deal of time and effort. With the crisis restricting the movement of people and the fact that most insurance companies are operating understaffed, policy checking teams are overwhelmed with work. They are having to put in extra hours to clear the piling backlog, which is leading to staff burnout and process errors, putting insurers at the risk of financial loss.
How Outsourcing Policy Checking Can Change the Game for Insurers
Smart players in the insurance domain have always recognized the need to delegate resource-hungry tasks such as policy checking to insurance BPO services. They realized tangible dividends from this move when the pandemic was wreaking havoc in the market. Insurers outsourcing their back-office tasks suffered the least from the economic collapse and were able to keep operations running with minimal disruptions. Following are a few reasons why insurers must outsource policy checking services in the post-pandemic age to ensure profitability.
| Global Insurance BPO Market will touch $8.3 Billion by 2027. |
Enable Virtual Work with Digitization
Competent insurance BPO services are equipped with cutting-edge technologies to enable policy checkers to connect with policyholders, brokers, and other stakeholders virtually. They can install systems to share policy and proposal documents without in-person contacts, reducing the chances of stakeholders contracting the virus. Back office service providers help their clients with custom platforms for issuing insurance certificates and managing changes requests from clients, thus propelling the ecosystem towards the desperately-needed digitization state.
Ensure Policy Data Integrity
The policy checking teams of insurance BPO services are well-trained in using advanced technologies to ensure the accuracy and safety of the policy documents they handle. They follow custom workflows and adhere to the industry best practices to accurately validate policy details. They deploy advanced scrutiny techniques to ensure high data integrity in policy quotes and proposals, eliminating all chances of errors during the filing of insurance claims and facilitating claims to be processed successfully.
| In 2020, the global insurtech market value stood at USD 2.72 billion. Owing to the increasing need for insurance digitization, its compound annual growth rate (CAGR) is expected to be 48.8% from 2021 to 2028. |
Ensure Accuracy in Policy Verifications and Adjustments
Policy adjustments require the team to evaluate a copious amount of data about the coverage and perform multiple complex calculations. At a time when most of the employees are working remotely, the lack of adequate remote working tools makes it difficult for them to evaluate and authenticate adjustments requested by policyholders to be accommodated in their policies. A reliable insurance policy checking services provider employs specialists who promise accurate adjustments in the policy premiums before they are dispatched from the underwriter.
After a year of unprecedented turbulence, as the insurance industry strives to find its footing and regain its mojo, smart work is the goal that they should pursue. This, by default, leads them to the digitization of processes such as policy checking, underwriting, and customer service to cut down on the business risks and prepare the workforce for future calamities. When crucial but tedious tasks are taken over by a competent firm, the core team can focus on the revenue-generating activities to ensure long-term growth and sustainability.
Who We Are and Why Our Expertise Matters
At Insurance Back Office Pro, we provide cost-effective back-office services to clients across the country from our multiple delivery centers. We provide expert professionals to handle loss run processing, policy checking, customer support, underwriting, and other services. We have a large pool of qualified workforce and can scale up to requirements in the shortest possible time. This backed by our state-of-the-art infrastructure, technical expertise, and years of domain exposure will help you stay on the profitability track even in the middle of the Covid-19 disaster.
