The COVID-19 outbreak has affected all businesses worldwide, and the insurance industry is also one of them. Major Effects of COVID-19 Outbreak on the insurance industry are-A surge in health and travel claims, interruption in business claims, pressure on sales from reduced business activity, and more!
In this uncertainty period, insurers must focus on their back-office tasks-claims management, policy renewal, loss runs processing, underwriting, and caring for their clients and staff –all while ensuring continuity of operations.
This is the reason most of the insurers opted for remote working and are managing operations pretty well. On the flip side, the insurance companies that have not opted for proper digital business models are having a tough time managing their business operations remotely.
Major Challenges Faced by insurance industry Amid COVID-19 Outbreak:
1) Increased competition among professional workers for remote job
2) The requirement of an advance security system
3) Difficulty while deviating from normal processes to online ones
4) A need for special attention because of increased risk of fraud and the unsettled control climate
5) Increase in claim processing work and queries
6) Protection against Cyberattacks during COVID-19 outbreak
How can Insurers Respond Effectively?
COVID-19 Outbreak is forcing insurers to think differently about their business Continuity plans to ease the financial as well as an operational burden. Insures need to devise strategies keeping in mind the present and future scenario, along with the following practices:
- Focus on the new norms of the working environment through digital platforms and remote working systems while creating engaging digital programs for up-skilling/re-skilling.
- Rethink on business services and focus on allowing contactless service/sales to cater to changes in consumer preferences and behaviors.
- Accelerate digitalization for greater simplification, convergence, performance, and comfort in the supply chain.
- Address rising enterprise and cyber risks, including claims frauds, privacy and data security, regulatory non-compliance, etc.
- Identify all equipment, processes, policies, and procedures required for the continuity of essential operations and services where personnel face inaccessibility or are remotely employed.
How Outsourcing Service Providers Help insurers Streamline their Business Operations?
During this crisis time, most of the insurance agencies have adopted the outsourcing business approach to streamline their business operations. Outsourcing is the most affordable approach for insurance companies to save their time & money without scarifying work quality. However, it is not the only advantage it offers; there are a lot more that can be gained through outsourcing:
1) Get access to the latest technology without spending on any infrastructure.
2) Get a professional team to work with a new norm of business without spending time on the searching & hiring process.
3) The number of risks comes down significantly due to risk sharing with your partnering partner.
4) Outsourcing is not just for large firms but well suited for small and medium-sized firms that have budget constraints.
Types of Tasks that Insurers can Outsource
Policy Administration: Insurers can hire professional service providers to manage the policy administration workload– policy checking, policy renewal, endorsements, quote generations, etc. With the help of outsourcing service providers, insurers get sufficient time to shift their focus on core competencies that lead to business growth.
Claims Management:Handing claims queries and administrative processes is one of the major concerns of insurance agencies amid this pandemic. With the help of outsourcing providers, insurance companies get experts to help manage their excessive claims management tasks on time.
Accounting and Finance: Outsourcing provides you with the support to manage your entire accounting and financial tasks like accounts payable and receivable, bookkeeping, invoicing, financial reporting, analysis, planning, etc. It can help you a significant amount of stress, money, and time.
Conclusion
This clearly states that by opting for insurance agency management services , insurers can easily manage their back-office processes and, more importantly, cost-effectively. The pandemic has caused many financial disturbances for the insurers, and outsourcing enables them to save cost, time, and focus on their core competencies.
