Back-office support is becoming increasingly crucial for insurance agencies of all sizes and specialties. Whether it’s compiling quote summaries, checking policies, administering commission payments, handling bank reconciliations, or generating policyholder renewal letters, every insurer can benefit from back-office outsourcing.
Increasingly, this approach is being recognized as an effective way to ensure administrative and data management tasks are handled professionally yet cost-effectively.
Why Insurance Back-office Services Matter
Today, an insurance company’s core activity is selling policies. Anything over and above is considered supporting services that don’t directly affect this primary activity. The back-office is often used as a term that describes all jobs that don’t directly generate revenue.
The back-office of an insurance firm is staffed by non-customer-facing administration and support personnel. Their activities typically include claims and settlements administration, record maintenance, and accounting.
That being said, back-office teams are a vital cog in the wheel of every optimally functioning insurance business. Every policy sold or renewed comes with a fair amount of paperwork, data input, payment processing, and more.
Falling down in this area will quickly show up in poor levels of customer experience; think delays in issuing or renewing policies, inaccurate or incomplete paperwork, out-of-date customer information, and delays in the payment of policyholder claims or agent commissions.
Is Outsourcing the Back-office a Good Business Decision?
Back-office outsourcing can do more than help insurers eliminate their data management pain points. More insurance companies are choosing to outsource back-office roles to reduce overhead costs and access resources in a labor market where talent is scarcer than ever.
According to the recent 2021 ISG Provider Lens™ Insurance BPO Services Report for the U.S., insurance carriers across the country are looking for provider expertise to supplement their in-house talent after significant employee turnover during the pandemic.
The report further states that:
- Many insurance carriers in the U.S. are still dealing with pre-pandemic issues like legacy technology system constraints while they market their services to an increasingly tech-savvy customer base.
- Carriers also face increasing competition from traditional and new competitors, such as insurtechs, as well as cybersecurity concerns and data handling challenges.
Outsourcing back-office operations is also a sound strategy to maximize operational efficiency in a competitive business environment. Internal resources can be freed to focus on tasks that support growth and profitability.
Ultimately, outsourcing back-office operations provides insurers with the following compelling benefits:
- Reduced workload for internal teams
- Lower operating and training costs
- Fast access to expert resources
- Ability to focus on core business activities
- More flexibility and scalability
- Streamlined administrative services
- Standardized business processes
- Improved customer experience and retention
- Ability to ensure business continuity in the event of a calamity or during particularly busy periods
Insurance Processes That Outsourcing Providers Can Handle
Here are some of the back-office activities that outsourcing providers can execute on your behalf:
The insurance industry, by its nature, involves significant amounts of data that need to be regularly collected and processed. This data is relied upon for various purposes, such as payments, audits, record keeping, and reimbursements.
The best outsourcing partners have teams of skilled data entry operators who can deal with just about any kind of data related to health, life, property, rental, and motor insurance.
Claims Processing and Payment
Claims processing can be a tedious and time-consuming process, as it requires a thorough investigation of each claim. Insurers need to review completed claims forms, review affected policies, and precisely determine the extent and value of each loss or damage suffered. Then they need to clarify all liable parties involved, and then, finally, make arrangements for and process payments.
Experienced outsourced claims processing resources will ensure you provide claimants with timely service, boosting customer satisfaction while saving you time and money.
Agent Commission Processing
You need a transparent, auditable, and error-free commission management system. However, today’s commission systems are more complex than ever, often costing more than they should to administer.
Insurance back-office services providers can help you streamline your commission setup by efficiently handling the mechanics of agent commission calculation, payments, and reporting.
Accounting and Bookkeeping
Accounting services that can be outsourced to back-office support providers include bookkeeping services, recording and processing accounts receivable and payable, compiling financial statements, completing tax returns, and reconciling bank accounts and policyholder accounts.
They can also help you maintain a healthy cash flow by following up on overdue invoices or missed payments and reporting on account balances.
Outsourced underwriting support firms can provide resources that allow your licensed underwriting professionals to focus on what they do best. They can take care of the more routine tasks that underwriters’ busy schedules often make it difficult for them to attend to.
The best back-office outsourcing firms have people that can take care of the full spectrum of underwriting support services – everything from application processing and eligibility checks to account verification. They can also scale at short notice to handle planned and unplanned work cycles.
Back-office Support from Covenir
Covenir provides insurance outsourcing services with an unparalleled combination of expertise and experience. You can depend on us to deliver:
- 24/7/365 support
- Expert services for all types of personal and commercial insurance lines, with deep expertise in auto and homeowners’ claims
- Custom, tailored services to meet your needs
- Extensive onshore industry experience
- Availability to extend your team during busy times, after hours, or for catastrophe response
- A flexible, collaborative “test and learn” approach
- The ability to support 175 languages
We’re your strategic partner, not just another vendor. We work with you to identify opportunities, overcome challenges, and achieve your long-term goals. At Covenir, we’re part of your team, not just an extension of it. We plug into your model, emulate your brand, and perform to your standards.