Transforming Insurance Operations After Covid: A Success Story

A Boston-based property insurance company with footprint in 13 cities across the US was facing significant problems with its mailroom operations – a problem common across the insurance spectrum. The 200+ workforce of the firm was trying to manage all aspects of operations in-house which is why it was struggling to distinguish between its core and non-core functions. And then came the Covid-19 pandemic which forced it to suspend operations temporarily as there was very little business, working capital, and an acute staff shortage.

According to a recent survey, 64% of insurers are worried about increasing labor costs, while 48% say the scarcity of key skills impacts their service quality and customer experience.

The Covid Hiatus and a Strategic Comeback

It took a while for the leadership to identify the weak links, acknowledge areas of improvement, and plan for a strong bounce-back by outsourcing back-office tasks. The efforts entailed the demarcation of the tasks to outsource and the ones to manage in-house, search for the right BPO partner, and other prerequisites. Finally, when things started falling into place with a competent insurance back-office service provider onboard, business began to pick up the pace.

In a survey of 200 insurance executives, 48% agreed that the Covid-19 pandemic showed the unpreparedness of their business to weather the economic storm.

Transformed Mailroom Services with Digitization

Digitization, an attribute of a technically sound company, leads to optimal outcomes. For this young firm, the outsourcing partner did what was long overdue in its mailroom operations. With data-capture systems, optical character recognition software, and high-volume production scanners in place, incoming and outgoing mails are now processed with a never-seen-before efficiency.

Digital data encryption and cloud storage have made it easy to sort and access information securely. With most processes automated and the remaining ones handled by skilled mailroom service professionals, there is a visible improvement in the pace of document processing. It has also eliminated human-based data-entry errors and ensured adherence to all compliance requirements for safely managing client information coming through the mail.

Digitization and cloud computing let insurers design personalized offers for consumers, such as pay-as-you-go insurance while reducing their operational costs. Given such benefits, nearly 70% of carriers have embraced such technologies.

Revival of Customer Experience

Customer service was raising alarms in the company even before the pandemic stuck. With a complicated purchase process, paperwork-heavy tasks, and outdated communication channels like email and phone calls, handling the high inflow of customer queries was overpowering the in-house team. With millennial consumers discarding traditional practices, corrective measures were urgent.

The BPO firm overhauled the customer service arm with a digital system to manage claim discrepancies and interact with customers. An AI-driven claims submission system now delivers seamless customer experiences across touchpoints, including web, mobile, and social media. A digital platform provides customers access to relevant info, cutting down on the calls to agents. Detailed customer feedback helps with critical insights that are used for continuous improvement.

Refined Claims Management

Tedious claims processing was a resource-draining function. And then the pandemic period saw an unprecedented rise in claim applications. With the in-house team already stretching beyond their work hours, a sudden rise in the demand for such operational capability diverted the attention of the team from core jobs, leading to erroneous claims management.

The claim adjusters of the vendor have helped realize effective insurance claims management. The vendor team is watchful in dealing with fallacious claims, saving the client from losing money in fake claims and enabling it to cut down on operational time and prices. Besides administrating claims, the team also provides relevant supporting information on deductibles, coinsurance, and co-pays.

Enumerating the Success Lessons

It took about three months for the insurer to realize tangible gains from this massive process turnaround. The impetus for the game-changing decision lies in recognizing the gaps in in-house technology and/or skills, the need for support during peak periods, and the inability of the workforce to solve frequently occurring issues.

Preparations – No Substitute for that

The management team knew that outsourcing starts with the right mentality, and it developed a well-detailed outsourcing strategy. This included allocating time and resources for research, selecting the right vendor, and transitioning to the new operational setup. Adequate homework on the financial implications of onboarding the vendor has reduced the overall operating costs.

Segregate Core from the Non-core

One crucial task for the insurer was to identify the areas for the vendor to manage. While core functions like product development, pricing, underwriting, and distribution were reserved for the internal team (at least for the initial phase), administrative functions, including operations, customer service, and premium collections, were delegated to the BPO partner, gaining a strategic advantage.

Smooth Onboarding and a Successful Transition

While handing over the tasks required careful planning, a major worry was in-house employees getting redundant. However, things were handled smartly to ensure minimal impact on employees. The affected people were given multiple options, including finding another role in the company and receiving a retirement package, thus retaining experienced employees and ensuring adequate staffing levels.

In a survey of insurers, about 60% reported that their companies had opted for furloughs and layoffs. More than 50% faced compensation cuts, limitations on bonuses and raises, and promotion freezes.

Technology to Foster Growth and Operational Resilience

The primary criterion on which the insurer selected the vendor was the latter’s command over emerging insurance technologies. It wanted the BPO to digitize the information flow for improved data share between carriers, brokers, and agencies. The BPO had to automate manual steps in tedious tasks to eliminate repetitive, low-value processes. The ability to leverage analytics to identify necessary coverage for insureds based on data and their needs was also necessary.

Vendor Performance Monitoring

The client knows that managing vendor performance is critical to a successful partnership. For that, it has opted for data-driven reports and KPIs. For unhindered communication between the sides, the vendor has appointed a manager as a single point of contact. There are regular conference calls, monthly scorecard reports, meetings, and data sharing to enhance transparency.

With a reliable insurance BPO firm in charge of back-office responsibilities, things are running smoothly for the insurer. There is measurable growth in customer satisfaction as per a recent CSAT survey and increasing revenues. The in-house team is delighted to focus on core areas without multitasking. The bottom line is that a careful shift of operations to a compatible outsourcing model leads to productive employees, improved finances, and most importantly happy customers.

The global insurance BPO services is set to reach US$8.3 billion by 2027.

Who We Are and Why Our Expertise Matters

Trusted for our quality insurance back-office services for over a decade now, today Insurance Back Office Pro provides operational support to industry-leading players. Our client-oriented service model enabled us to maintain a streamlined policy administration process even during the peak of the Covid-19 pandemic. This helped clients to handle massive volumes of customer records and incoming queries with utmost accuracy.