In this fast-changing business environment, insurance companies and agencies are adapting to fundamental transformations. With the continuous evolution of the insurance sector and the suddenly-occurring global events, insurance business and operations are becoming challenging to manage. Moreover, market disruption is setting up a whole new pile of issues.
Consequently, from leveraging technology for claims management to keeping up the pace in operational workflow, through to adopting innovative process development strategies, today’s insurance COO faces several administrative challenges every day. However, while there are challenges, there are solutions too, which we will discuss in detail.
Administrative Challenges Insurance COOs Face
1. Retaining Employees is a Big One
Most of your insurance professionals might be working under the burden of repetitive and tedious manual work related to back-office functions such as forms processing, policy issuance, generating loss run reports. Entry-level employees, especially ambitious ones, are seeking change, hoping to reach higher designations. When experienced slow or no growth, many employees quit. This is one of the primary reasons behind low employee retention and high turnover rates.
After months of training and working well in your company, your top performers want to get promoted to senior positions. If they are not promoted, they are likely to leave. As a solution, you can reduce their tedious workloads to help them avoid workplace burnout and acknowledge their achievements or maybe give them rewards. In this way, you can enhance employee satisfaction and increase retention rates.
2. Rising Recruitment Costs
Recruitment is already a long tiring, process; moreover, expenditure on this is never fixed. You might find an experienced candidate seeking a higher salary or else choose an inexperienced one and then spend additional money to provide the required training.
The estimated cost of replacing an administrative employee whose annual salary is $20,000 to $30,000 can be as high as $6000. Thus, it would be fair to say that if you decide to put effort into retaining an excellent employee, it will be a financially sound decision. To retain reliable employees, keep them happy and motivated.
Another way to save costs here is to look for alternative models that help optimize business productivity. In such scenarios, businesses often mix up two of the most proficient yet different strategies. Both the models, staff augmentation vs outsourcing, are opted for. However, getting tasks outsourced to reliable insurance BPO service providers have an added advantage. Service providers in this business line usually provide full-time equivalents (FTEs) at affordable prices. You can outsource a few insurance administrative tasks or back-office duties to get the work done at a fraction of the cost. With this, you will save enough money and enable your employees to focus on more strategic and customer service-oriented functions.
3. Maintaining Workflow Efficiency
You might be overlooking various factors responsible for the lack of efficiency and smooth workflow. For example;
- Outdated organizational structure
- Legacy systems and software
- Unorganized company data
Searching crucial information on one platform and proceeding further with the next steps on another can leave your teams struggling to collaborate and acquire the information required. This can also arise data management challenges and security risks. Above all, handling the same tasks throughout the day, every day can lower employee’s morale, hampering their performance and productivity.
For these challenges, automation can be the best solution; by automating repetitive back-office tasks and processes, you can free up a lot of your teams’ valuable time and energy. A Harvard Business Review study shows – with basic digitization of the current processes, insurance companies could;
- Cut costs by 65%
- Reduce crucial processes’ turnaround time by up to 90%
- Increase conversion rates by 20% or above
Taking help from automation and revamping key processes can help remove bottlenecks and maximize the appropriate usage of working hours. This can further improve efficiency and the ability to make informed decisions for future success.
4. Backlog – a Huge Time-Eater Costing You Potential Customers
Process delays or slow turnaround times can increase backlog, damaging your relationships with customers. Apart from losing employees, a lower customer retention rate is a big risk-alarming concern.
Due to heavy backlogs, your teams might not be able to complete policy issuance jobs, missing out on many revenue opportunities as the customers might leave if it takes longer to issue their policy. Similarly, delays or inaccuracy in claims settlement, due to any reason, customers can lose the trust they had in your company at the time of purchase.
Remember service quality and its on-time delivery influence how the market perceives your company’s customer service levels. Insurance business process outsourcing services can play a significant role in helping you enhance service quality, delivery speed, and accuracy. They can provide uninterrupted back-office support (from policy issuance to claims management) to insurance companies and agencies across the globe.
5. Fast Growing Competition
Your completive analysis might have shown the insurers performing well in the industry. You must also know that in the last decade, insurance companies are increasingly changing their attitudes toward insurance BPO and considering it as a source to gain a competitive advantage.
Moreover, amid all this COVID-19 crisis, the global Insurance BPO market is estimated to grow from $6 billion (2020) to $8.3 billion by 2027. The estimated CAGR is 4.9% for the forecasted period. Source
Here, one thing is clear, whether your company is outsourcing or not, many of your industry peers are. Yes, insurance BPO can be a proficient solution to your challenges in enhancing your service standards, overall productivity, and revenue. With a reliable insurance support partner, you can also save your company thousands of dollars, streamline operations to become and stay one step ahead of your competition.
6. Lack of Reporting and Analytics Solutions
If you are unable to obtain your company data, you are losing on crucial data that can help you make effective decisions as a COO. In the same way, if you have reports but lack analytics software or tools, you might not get valuable insights needed to make process-related improvements.
Among several others, ask your team these questions:
- How many policies did the company issue in the previous week or month?
- Have they met the predefined turnaround times (TAT)?
- Reasons behind not meeting TATs?
- What was the error rate in policy details?
- What can we do to improve?
Still unsatisfied? Insurance Support World has the answers to all your concerns. If you do not have a dedicated team to prepare operational and financial reports, outsource your company’s repetitive, low-margin back-office functions to us and utilize your in-house resources for analytics and strategic business planning.
We can help you efficiently increase operational transparency, streamline processes, and improve performance and productivity, leading to more business growth opportunities. Learn more about our quality insurance BPO services; Call at +1 646-688-2821 or email at [email protected].