No one can predict when disaster will strike or what magnitude. Rather than being left scrambling to keep operations running smoothly, having a plan can help insurers navigate the worst and ensure they continue providing essential services to policyholders.

Disruptions can come in many forms and can significantly impact business continuity – an insurer’s readiness to continue operations after being disrupted by an unexpected event – and policyholder experiences.

Such disruptions can include:

  • Natural disasters
  • Power outages
  • Security breaches or cyber attacks
  • Supply chain disruptions
  • Machinery/equipment failure
  • Staffing shortages

Any time something happens to keep the insurer from operating normally, it becomes a business continuity issue.

Identifying Potential Risks

Part of building an adequate risk management strategy as an insurer is identifying possible operational risks. These risks will likely depend on your geographical location and the policyholders you serve, among other factors. In addition, certain disruptions may be more likely than others.

For instance, an insurer in Michigan likely won’t face disruptions from a hurricane that hits the Gulf Coast. Instead, a large blizzard or snowstorm could be much more likely and imposing on operations.

Aside from natural catastrophes, insurers can also be susceptible to staffing shortages or talent gaps that limit their ability to serve policyholders. As of late 2022, insurers employed 1.56 million people in the US, compared to 85,000 people in 2020. With skills shortages affecting most industries, it’s critical to identify key roles within the organization and ensure you have backup plans in place if they become vacant unexpectedly.

Creating a Business Continuity Plan

Creating a business continuity plan can differentiate between failure and continued success. It’s critical to your overall risk management procedures and will help you be more prepared to deal with unexpected events. It contains an actionable outline for how you will continue operations following a disruption, including details such as:

  • Any backup systems or power sources you can access
  • Instructions for retaining communications with employees and policyholders
  • Backup data storage locations
  • Alternative working arrangements
  • Alternate staffing arrangements, such as a trusted Business Process Outsourcing (BPO) partner

Creating a business continuity plan is a great start, but it’s also important continually test and update your continuity plan to ensure it’s adequate for your needs. It may become outdated and ineffective without regular testing and updating, leaving you vulnerable to disruptions.

Especially as your operations evolve, the continuity plan will need to be updated to fit the new systems or processes. This may include testing backup systems, training employees on their roles and responsibilities, or working closely with a BPO partner prepared to scale up services as needed.

Testing and updating the business continuity plan can help also build confidence among employees, stakeholders, and customers that the organization is prepared to handle the unexpected.

Ensuring Communication and Collaboration

Throughout the process of creating, testing, updating, and implementing a business continuity plan, retaining good communication and collaboration with your team is of utmost importance. Anyone involved in the organization, including management, employees, and vendors, must be aware of the plan if they’ll be involved in the response.

Establish clear lines of communication and provide regular updates on the situation. Be open to questions and address any concerns they may have about the status of operations and what steps are being taken to address the situation.

Above all, supporting your employees is critical during times of uncertainty. They’re often the ones most impacted by a halt in operations, especially in the case of staffing shortages or altered working conditions. Providing support is essential for maintaining employee engagement, and an engaged team reflects positively on your brand and boosts policyholder experiences.

Leveraging the Right Resources

The key to business continuity is adapting quickly and using the right resources. The process is easier said than done, but with the proper preparation, insurers can feel confident that their operations won’t suffer should unforeseen events occur.

Leveraging the capabilities of the right BPO partner can also be invaluable in ensuring operations remain uninterrupted during disasters or staffing shortages. At Covenir, we have skilled teams of onshore talent eager to jump in when needed. We offer on-brand support so your policyholders receive the same service they have come to expect, including customer service, FNOL and claims, underwriting support, and more. Let your team focus on your core activities, and we’ll seamlessly integrate with you to ensure business continues as usual.

While you can’t predict which disruptions you’ll face, having a business continuity plan and a BPO partner you can rely on for extra ‘people power’ will help ensure business continuity, great policyholder experiences, and long-term growth.

Contact us today to learn more about how we can help you stay ahead of the curve.