Why digitization is virtually indispensable for the insurance industry

Why Digitization Is Virtually Indispensable for the Insurance Industry

Insurers typically rely on a data entry service provider with a view to save costs, but now they consider business optimization as the major focus of digitization.

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The digital wave is sweeping across all industry sectors and this has immense implications for insurers as well as brokers looking to have a constructive engagement with their customers and grow their businesses. Digitization and automation is expected to reach full growth and become routine by 2017, when the millennial generation attain their maximum purchasing power. While it is true that a number of insurers have been utilizing document conversion services for many years now, the movement of paper documents into and out of insurance companies continues incessantly in the form of–

paper, faxes, checks, cards, and envelopes. While mid-sized insurers create and receive millions of paper documents each year, large insurers must handle hundreds of millions of documents on a yearly basis. Statistics show that 63% of insurance businesses reports that they are ready for digitization, only 23% of these businesses is actually ready.

Factors that pressurize the insurance industry to adopt digitization are: 

The huge increase in the number of mobile users, preference for cloud-based technology, and rise in social media interaction.

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A vast majority of insurance policy holders now demand that some or all of their documents are delivered electronically.

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The growing, tough regulatory environment in the insurance sector – insurance entities are bound by U.S and state government regulations. This is to ensure efficiency and compliance with federal and state standard procedures.

Traditionally, insurers have relied on a data entry service provider with a view to save costs, but now they consider business optimization as the major focus of their digitization project. So what are the paper assets they look to digitize and streamline? 

Applications

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Quotes

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Customer letters

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Bills and statements

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Attachments/trailing documents with submissions

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Regulatory notices and letters FNOL

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Financial reporting

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Death claims reports

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Correspondence from claims providers

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Renewal notices

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Loss control reports

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Premium payments

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Underwriting correspondence

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Incoming faxes

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Checks, cards, envelopes

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Policies

Let us look at the tangible advantages insurers stand to gain with digitization.

Digitization prevents loss of data and also misrouting of customer complaints, ineffective claims process, mishandling of accounts etc and improves the overall insurance records management. 

Improved customer experience: With digitization, customers can easily buy an insurance plan online or via a distributor. Insurers have simplified the application process with minimal medical exams via requesting previous records, declarations and by arranging online medical appointments. Importantly, customers have an improved experience with innovative technology in document submission and online underwriting. Customers have all the information they need at their fingertips. They can access their policy information on the go via mobile/internet.

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Consumer-oriented approach: With digitization, consumers can obtain more information on product charges, where the premium they pay go, the amount that actually goes towards core product and the amount that goes into distributor commissions and other expenses.

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Insurers can directly establish contact with their consumers: Now customers can do their research online and assess multiple products from different insurers.

They can take an informed decision and purchase the right plan or product based on their need. The purchase can be done online itself, which is most convenient.

Insurers on their part strive to provide their consumers with the appropriate planning tools, easy to understand products and simple purchase option.

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Less risk and fraudulent activities: Insurance companies have many activities like policy administration, application processing and so on which require great attention, and the chance of fraudulent activities is also high. Having a controlled environment and securing the data with limited access is possible with digitization.

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Meet regulatory requirements: Insurance companies strive for higher corporate accountability in the case of regulatory requirements. With digitization companies can stay compliant with HIPAA, NAIC CIPR etc.

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More investment: Digitization enables companies to handle critical data and collaborate efficiently and effectively. This improves the efficiency of the insurance companies, enables expansion of companies and promotes more investment.

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(800) 670 2809

Over the past decade, legal constraints related to signatures and the requirement to maintain paper copies of applications, customer correspondence and policy documents have been considerably reduced. The stumbling blocks that existed with regard to capturing customer input digitally and delivering customer documents electronically have also been overcome. Now insurers can seriously proceed with their digitization work, which can be speeded up with external support from a provider of data entry outsourcing services. The faster the digitization, the faster will be the rate of improvement of organization efficiency and customer satisfaction. Insurers must focus on speedy capture of data through efficient data processing, and creation and delivery of more digital information. For this they have to take full advantage of reliable data entry and digital capture solutions, efficient workflow and superior content management systems.

www.managedoutsource.com

(800) 670 2809