One of the major back-office functions in the insurance sector is claims processing. This activity is today growing exponentially, not only due to the regular claimants who find their policies purchased a decade back maturing now but also from another angle which is growing in importance. Insurance companies face a heavy workload handling payouts for natural disaster victims and terrorism-related incidents. Outsourcing claims processing prevents overwhelming tasks. This would also divert their attention from core jobs like devising new schemes and selling them.
Outsourcing Claims Processing: Insurance Companies’ Preferences and Perspectives.
Reduction in work pressure – Claims processing as is other back-office tasks is supportive in nature to the main work in the insurance sector which is strategizing new policy schemes and selling them. Being in the service sector high standards in customer service has to be the main focus and this would be diluted if attention was to be given to such ardors and laborious tasks like administrative functions, data processing, and claims management. Insurance companies in the present scenario also prefer to outsource policy management along with related tasks.
Reduction in costs – The magnitude of the process of claims administration necessitates huge investments in infrastructure. This includes setting up sophisticated systems and recruiting manpower which can be avoided by outsourcing claims processing to companies that already have the required resources in place. The resultant cost savings can be better utilized in devising optimum priced insurance products which will enable individual insurance companies to retain their competitive edge in the industry. They will have more leeway and flexibility in making product prices more attractive and lucrative for customers.
Claims processing is a continuous process and therefore by outsourcing these section insurance companies reap the benefits around the year. A look at the various factors that make up claims management will substantiate the assertion that insurance companies would like to and want to go for outsourcing claims processing.
Why Insurance Companies Opt for Outsourcing Claims Processing
Complex claims eligibility assessment – This is a huge field that definitely distracts insurance companies from core tasks. Apart from identifying and solving complex issues regarding the authenticity of claims, settlement in scenarios such as terrorist activities and natural disasters necessitate meeting many statutory and legal requirements that depend on the law of the land.
Quick adjudication and disbursement – Insurance companies sell policies with the premise of expedited adjudication and disbursement post-maturity or in cases of early claims. However, the sheer volume of claims, often reaching hundreds of thousands, can bog them down, diverting focus from core functions. This is a very crucial reason why outsourcing claims processing is always preferable.
There are outsourcing companies that focus specially and exclusively on claims management processing. They are a boon to insurance companies as most, if not all prefer to outsource this activity.
Outsourcing claims processing holds immense value for insurance companies when supported by efficient communication, well-defined performance metrics, and continuous monitoring. Get in touch with us to discover how we can prove to be your best support. Call us at +1 646 688 2821 or send an email at [email protected].