The pandemic illustrated that, for many businesses, their operations can continue to run smoothly with people working remotely. This was particularly true for the insurance industry, which was able to pivot during the mandatory lockdown and, for the most part, continue to provide customers with the products and servicing they needed. The pandemic also demonstrated the benefits of outsourcing tasks, including to those who may have been hesitant to do so in the past. Employers' skepticism toward remote teams has waned.
Outsourcing back-office and administrative insurance program tasks with the right partnership provides the insurance industry with several tangible advantages.
Help Reduce Costs
Transferring certain business processes, such as policy checking, endorsements, issuance of certificates of insurance, and renewals, to an outsource company can save you money. Outsource companies are typically located offshore and have trained staff who are paid at a lower rate than your account managers and representatives. You can lower your payroll, benefit costs, payroll taxes, and the physical costs of housing employees (desk/chair, office space, software licenses) to do this work.
Improve Customer Service, Retention
With fewer administrative tasks on their plate, account managers and representatives will have more time to perform client-facing services to improve customer service and retention and help grow the agency’s book of business. Your staff is not spending time doing routine tasks that can easily be outsourced.
Minimize Errors, Reduce E&O
Account managers and representatives are pulled in many directions during the day, making it difficult to focus their full attention on back-office processes such as policy reviews and checking. This opens up the possibility for oversights and errors, particularly as there are often policy discrepancies that need to be checked and reconciled against bound coverage and any additional endorsements that were requested by the producer. A dedicated outsourced staff whose sole task is to check policies will help minimize the risk of mistakes and the potential for an E&O claim because of an oversight or mistake.
Enable Flexibility and Scalability
When planning a marketing push to expand geographically or generate more revenue in a specific niche market, you need to be able to scale quickly. In-house teams frequently require more time to respond to a demand for scalability because of staffing, system, and equipment resources. Outsourcing back-office functions provides the required flexibility to respond to your scalability requirement without the need for a large capital investment for staffing or physical installations for facilities and equipment (hardware and software).
Address Skill Shortages
Like most industries, hiring talent to fill insurance positions has become more difficult as people reevaluate their career options. Outsourcing insurance programs and talent can boost productivity and profitability for insurance agencies and companies that already have skilled and experienced employees by transferring routine tasks. This allows these employees to concentrate on their expertise and deliver high-value output.
In deciding to utilize an outsource provider, be sure to discuss costs, insurance training and qualifications, security measures to protect policyholders’ data, and regulations regarding policy information and confidentiality.