How Outsourcing Insurance and Other Business Process Can Assist With Conquering the Underwriting Slump?
Outsourcing functions in risk management can help companies improve processes and save in terms of costs and the companies in the industry continue to realize that as it becomes more complex especially in terms of scope. At the very center of affairs is underwriting, which affects profits and development of new products much more than most people know.
The amount of premium to be paid and the risks linked with new products are analyzed by underwriters. The talent available in the field of underwriting has become rarer on account of the requirement for introducing new products and greater attrition. In North America, the shortage in talent is pegged at 40%-50%. There is a shortfall of resources with proper training as not many companies can have enough money to pay for training.
A pool of trained resources that can be tapped into quickly through outsourcing is being looked at by health and life insurers, so that they can have critical talent in underwriting required for new product launches. For periods when work is at its peak, it is not pragmatic to train temporary staff. Also, staffing levels can’t be maintained at maximum throughout the year as pressures of cost continue to mount.
The issues that are to be resolved through outsourcing should be clear from the initial stage itself. The question then arises that why outsourcing insurance should be resorted to by a company. Reductions in backlogs in the gathering of data, processing of too much paperwork, reductions in overloads of administrative work and expansion in numbers of personnel are among the bottlenecks that could be cleared through outsourcing.
It is significant to have sufficient capacity and experience in underwriting of insurance. Some companies provide a complete set of services in underwriting while others provide only tele-underwriting.
The capacity to bring out tailored solutions is among the significant aspects to be considered while selecting an outsourcing service provider. The ability to integrate with the work cycles of a company and handle appropriate service levels is also significant.
The functions that are to be outsourced out of all risk management functions have to be decided. Before underwriting begins, the profits and risk exposure are impacted by pre-underwriting functions and these may be outsourced. Personal health interviews, entry of data, collection of data through tele-calling or email and vetting of applications are among the pre-underwriting services that may be outsourced.
Underwriting remotely is another aspect. Underwriting based on stringent rules or automated underwriting can help reduce backlogs and counter any attrition of underwriting talent.
More clients can be retained on account of analytics provided by the company to which work is outsourced, in addition to the resources freed up through outsourcing. Management of relationships, negotiation and analysis of segmentation are among the tasks that underwriters can concentrate on after analytics are outsourced.