Revolutionising Insurance Back-Office Costs with Automation
Written at Jul 31, 2023 2:01:37 PM by Julie Mesi
The insurance industry is one of the most tightly regulated and highly competitive markets in the world. With an ever-growing number of players competing for a piece of the pie, controlling costs has become critical to sustainability and profitability for insurers. Automation is the key to success in such a challenging environment, enabling companies to streamline processes and reduce expenses.
Exploring the Operating Costs of Back-Office
The insurance sector has been notoriously slow to keep up with the times, having only made minor modernizations over the past decade. This is largely due to the complexity of its systems and structure, as well as its risk-averse culture which discourages innovation. Behind the scenes, insurance companies are tasked with managing a massive number of claims, cashflows, and policy systems, many of which are antiquated legacy systems. In order to compete in today's digital age, insurers must not only address this technical debt but also actively seek out new ways to increase their productivity and become more agile in their operations.
The rising cost of back-office operations is due mainly to the fact that manual processes and paperwork are still heavily relied upon. Data collection, in particular, is done using antiquated and inefficient strategies such as PDFs, Excel or even paper forms. This leads to errors creeping into the process, resulting in a longer and more complex claims-handling process. According to Accenture, administrative expenses typically account for 20% of an insurer's Gross Written Premium. This means that even the smallest changes implemented in these operations can have a significant impact on their bottom line. It is becoming increasingly important for insurers to keep up with technological advancements and incorporate new back-end technologies into existing processes in order to remain competitive and credible.
Insurers need to understand that the administrative burden associated with managing customers’ policies, claims to handle, and marketing has become more sophisticated than ever before. By adopting new technology solutions, they will not only save costs but also improve customer satisfaction levels by providing faster and more personalized service. Automating manual processes such as claims adjudication or policy administration can reduce errors while improving efficiency and speed of service delivery.
Uncovering the Transformative Potential of Automation in the Insurance Industry
Today’s insurance industry is a highly competitive, high-pressure marketplace. Insurers are continually looking for ways to remain competitive in the market, which involves automating processes to reduce operating costs and eliminate bordereaux. But so far, automation transformation has mostly been limited to customer-facing processes. It’s time insurers take the next step and upgrade their back office operations as well.
The primary goal of moving towards an automated back office system is to streamline operational costs, as well as simplify and speed up the process of managing complex insurance data. Automation technology can help insurers achieve this goal by increasing efficiency, accuracy, and security across a wide range of operations – from policy administration to claims processing.
There are numerous benefits associated with automating back-office operations in the insurance industry. Automation will help insurers reduce manual errors and save valuable time and resources that were previously spent on mundane tasks like manual data entry or paperwork processing. By transitioning processes such as billing, underwriting, and claims management into an automated system, insurers can also improve their accuracy and increase customer satisfaction by providing faster response times while reducing administrative expenses. Additionally, automated systems give insurers access to more accurate records that can be used for better decision-making when it comes to fraud detection or risk assessment procedures.
In summary, investing in back-office technologies such as automation can give insurers an edge over their competitors by allowing them to quickly process claims and policies with fewer mistakes while also giving them the ability to anticipate future shifts in the industry landscape. With all this technology at their disposal, they are better equipped to make well-informed decisions that will benefit them now and into the future.