Outsourcing procedures for handling insurance claims

Outsourcing procedures for handling insurance claims

The claim handling procedures are expensive and claims may take quite a long time to be processed from the time of initialization to a decision being taken. In fact, it can take up to 1.5 months for an insurance claim for life to be approved, 1.6 months for a injury insurance claim, and 1.5 months for an Income Protection claim to be handled. Insurance companies must remain looking for methods to cut these handling periods to enhance the satisfaction of their customers and decrease cost.

A solution: outsourcing. In this blog, we'll review the current state the insurance market, the benefits of outsourced insurance claims processing and the reason you should outsource the insurance claims handling process and which claims handling jobs are best suited for outsourcing.

The present situation of the market for insurance

The insurance market worldwide is expected to grow by a compound annual amount (CAGR) of 6% per year from 2021 - 2025, reaching U.S. $6.4 trillion by 2025. In a report by Deloitte it was found "that despite ongoing COVID-19 issues and other concerns, insurance companies in general anticipate more rapid growth from 2022. However, non-pandemic problems with regard to regulation, talent, sustainability and changing consumer preferences could present some bumps." A key takeaway of this report is that much will be dependent on how insurance companies manage their investments, particularly in the latest technologies and human capital.

This boils down to their ability to manage automated processes and human-like customer serviceand to implement flexible working models, like outsourcing. With the demand for insurance forecast to continue rising worldwide, so will the need for improved insurance claims handling procedures. Flexible working models Deloitte describes can be easily applied to the handling of insurance claims. In fact outsourcing is a suitable strategy for business in insurance claims handling.

What type of insurance claims are you handling?

Claims processing and handling is a major part of insurance operations that involves the examination, investigation, adjustment and remittance for insurance claims. The full-cycle handling of claims isn't always performed by a single individual. You may have a team responsible for the review and investigation part and another responsible for adjustment and the remittance. The majority of the time, this task is split between senior and junior claims processors, respectively. This is why insurance claims processing works best working in teams, reporting directly to an experienced team leader for advice and the ability to escalate.

Outsourced insurance claims handling occurs when a company contracts a third-party organization out of the office. This can be overseas or within the same country or just in the next country. When outsourcing is done abroad, it's referred to as offshoring. Outsourcing the insurance claims management process may mean that you send tasks externally, such as filing and managing claims as well as managing information, determining liability and coordinating with other providers.

Why should you outsource your insurance claim handling?

Insurance companies are constantly seeking ways to improve their overall percentage of market shares and their overall competitive edge. The use of dedicated insurance claims processing teams is a good approach to begin. These teams have the knowledge as well as the knowledge and expertise required to handle various insurance claims. Here are a few reasons why outsourcing can be beneficial to your insurance claim process.

Cost reduction

Processing claims involves a large investment in capacity and infrastructure for the workforce. A sudden increase in the number of insurance claims because of natural disasters or global pandemics can result in sudden hiring drives and costs that can mount up. And that's not even counting the amount of time and resources it takes to process claims and comply with the requirements for compliance that could be better spent internally, such as establishing strategies for marketing or maintaining important stakeholder relations.

outsourcing your insurance claims handling tasks could save your business up to 70% on labor costs by itself.

Improve customer experience

Today's consumers expect quick and rapid results, and at the same time, being reassured and supported during the claim process. Claim settlements typically occur as a result of an event that is stressful for customers. If you'd like to retain customers for a long time, it is important to make sure the entire claim process is smooth and simple for them.

Insurance outsourcing providers meet the highest customer service standards for processing claims for insurance and providing a great customer service. It is suggested that you work with the outsourcing company you choose to define the key performance indicator (KPIs) and set expectations for customer service.

Allows access InsurTech

The most experienced outsourcing providers are aware of the latest technologies that insurance companies utilize for claims processing. Through working with these outside suppliers who have an understanding of InsurTech it is possible to move your claims handling processes to the most efficient and effective digital environment.

Digital claims technology can bring about the 25-30% reduction in claim expenses and improve customer satisfaction scores by 20 percent. Access to these insurance-based technology systems can ultimately result in an impact on many areas of your business that range from cost to the customer experience.

24/7 claims support

Unpredictability is part of nature. There's no way to know what might happen when your customer goes to their home each day. They could be in a car accident or hurt their feet while walking down the steps. Since you, as an insurance provider are unable to prepare for the possibility that your customers will to require claims assistance outsourcing companies give you the option of having a 24 hour claim handling teams.

This way, your customers can rest assured knowing that should anything happen to them, whenever it occurs, they will be dealt with. This will improve your customers' experience as well as your competitive advantage. It is a good idea to hire 24/7 insurance claim processing teams from a lower-cost economy, such as the Philippines can be cheaper than hiring local.

Scalability for businesses

The outsourcing of your insurance claim processing can boost profits as well as boost your company to grow. By putting the additional capacity offshore, your onshore team will be free to complete more tasks and expand your business in a sustainable manner.

Knowing the insurance claims tasks are in good hands can give your employees in the local area to concentrate on strategies to increase the effectiveness of customer relations.

Improve flexibility and efficiency

Outsourcing will allow you to quickly and easily grow your team according to business demands. If you experience a rise in insurance claims occurs you are able to easily increase the size of your team overseas. Outsourcing permits you to move or remove claims processors, based on the requirements of the market for claims.

What claims to handle tasks are able to be outsourced?

Insurance claims processing duties and tasks that you can outsource include, but aren't included in:

Reviewing claim submissions Inquiring and verifying information Correspondence with insurance agents as well as beneficiaries Preparing claim forms Record management and maintenance of insurer policies as well as claims in database systems How to determine the coverage of the policy and the amount of payout claims.

The insurance claims processing tasks are all quite repetitive and require compliance, which requires the highest level of attention to detail. This is why they're ideal for outsourcing.

What's next?

The advancement of technology, the use of data and increasing demands from customers have changed the way businesses operate but, certainly regarding cyber risks, insurers are "behind" compared to banks and other financial sectors. There's never been more critical moment for insurance professionals to not be merely aware of the current issues in their industry, but to embrace simple, smart, as well as cost-effective solutions to address them like outsourcing.

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