In today’s competitive landscape, growth and profitability are the key objectives of every business, and insurance organizations are no exception. For this, selling an increased number of policies is one of the significant goals of insurers. Henceforth, policy management is crucial for all insurance businesses. But the network of entire insurance sector has to manage a vast amount of tasks to streamline processes which is quite challenging for them. Then, how insurers are finding ways to meet these challenges? How should they ensure uncompromised policy management support?

This blog will take you through the challenges faced by insurance carriers and how they can seamlessly execute policy management services, enhancing customer satisfaction and retention.

Policy Management Challenges Faced by Insurers

High Operating Costs:

• Insurance operations require considerable time and effort in the case of policy management services.
• For tedious tasks like document review, policy checking, etc., expert professionals are required who are paid high remunerations increasing the overall operating budgets of the insurance company.
• Besides, paperwork costs can also increase if there is a sudden hike in customer flow.

Process Delays

• Policy management is a very complex and comprehensive process that entails a broad spectrum of activities that are managed by various teams and professionals. For instance, someone would be dealing with proposal generation while others would be reviewing policies, and someone might be handling renewals while someone else would be managing policy cancellations.
• The majority of policy-related tasks are interconnected and dependent on different individuals. This interdependency and multiple approval processes lead to inconsistencies causing delays in the entire process.

Resource Acquisition

• Policy management is one of the vital processes of any insurance business and needs a team involving a sufficient number of professionals. Generating quotes, checking and binding policies, managing policy issuance, renewals, etc., cannot be done by just one person.
• However, with the previous-generation employees retiring, recruiting is becoming quite hard. As per the Bureau of Labor Statistics, in the last ten years, insurance professionals aged 55 and older have increased at a rate of 74%, and in the next 15 years, 50% of the current insurance workforce will retire. It is becoming difficult to attract millennials as they want to explore opportunities of their own choice. A recent report emphasizes, “90% of Born Digital employees do not want to return to full-time office work post-pandemic, preferring a hybrid model instead.” This is a huge challenge for insurance carriers considering the high volume of work they deal with and reduced resource acquisition.

Technology Struggles

• Many carriers are still using legacy insurance systems simply because their employees are most comfortable with the same.
• Even if some insurers invest in advanced technologies, they face issues in operating them. Not being able to utilize technology appropriately comes up as a significant challenge they must find solutions for.

Compliance Issues

• Insurance is a highly regulated sector. Hence, insurers must ensure their practices and operations are in line with the compliance guidelines.
• Still, some policy management processes are so complicated that sometimes a few things may slip by through the loophole. This is another major challenge for insurance businesses.

Client Retention

• Process delays and the struggle to use technology play a key role in customer attrition. Do you know? A PwC report highlights that customers are likely to switch providers due to a lack of digital capabilities. When there are delays, clients don't think twice before switching insurers. For instance, as a carrier, if you delay a client's claim settlement, they might feel devalued, which leads to dissatisfaction.
• Similarly not being able to make proper usage of technology to speed up processes and enhance customer communications can lead to a risk of client attrition.

The challenges discussed above are common across the insurance industry, but the question is, can outsourcing be a viable option to meet them? Let’s read more to find out.

How do Outsourcing Policy Management Services Help Insurers Meet the Challenges?

Today, many reputed insurance firms are outsourcing policy management services to reliable third party professionals who offer them improved quality services and business profitability. As a result, the workload of the team is minimized as the partner company manages non-core tasks, while insurers get more time to focus on revenue-generating operations. Some benefits that outsourcing policy management services offer are as follows:

Considerable Savings by Reduction in Overhead Expenditure

Outsourcing policy management services will eliminate recruitment, training, or any other overhead costs. All you need to pay for is for the work done for you, and that expense would also be minimal as many insurance outsourcing companies operate out of developing countries where labor costs are low. This helps you gain the benefit of global labor arbitrage without having to put in effort, saving a considerable amount of money.

Skilled Professional at your Discretions

Outsourcing can be one of the foremost ways of bridging resource gaps. You might be wondering how. Insurance outsourcing providers employ a large pool of skilled professionals who undergo regular training in order to improve their expertise to meet varied client requirements. Your outsourced partner can bring along a team of special skills and experience that you might not find easily.

Reduced Turnaround Time for Policy-related Operations

The majority of the delays are caused due to errors and discrepancies. When you outsource the time-consuming policy management tasks, you can be assured that your outsourcing partner company has quality audit procedures in place to make sure that the errors & mistakes are eliminated, and the work is done at a reduced turnaround time, ensuring smooth operational workflow round-the-clock.

Get More Time for Value-adding Business Aspects

Policy management is a complex & highly demanding process that needs a lot of time and effort. Now that some reliable partner is taking care of your repetitive and tedious policy management operations, you have got the time and resources to concentrate on your core competencies that can actually create value. It’s not just limited to that. Your outsourced partner will have a quality testing process in place to reduce your supervision needs, enabling you to save your time that you can spend on other functions like client servicing and sales.

Make Beneficial Use of Advanced Technologies

Imagine what will happen if you have invested in the latest & advanced technologies, but your employees are incapable of using them? Your investment would go in vain and not bring enough ROI. Then, what will enhance your profit? You can outsource policy management services and get support in utilizing technical tools and software in the best possible manner. The outsourcing provider keeps its resources trained, making them experts at operating industry-standard technologies, bringing the best out of your tech investment.

Wrapping Up

Taking into consideration the points that we have discussed, it would be fair to say that insurers who are embracing outsourcing will enable you to meet the policy management challenges.

Are you planning to outsource policy management services? Get in touch with us to know how we can be a reliable support for you.