The goal of any business is to out-compete their competitors, either through growth or by sustaining the corner of the market they’ve captured. It’s not enough to execute upon a process; there needs to be an advantage that differentiates their organization and enables their teams to capitalize on their target customer base. Regulation has forced commercial insurance companies to get creative when differentiating themselves in the marketplace, shifting their focus from the rates they offer to ancillary services that complement the policies they write. Without technology to facilitate these processes, teams are forced to produce manual work-arounds, which reduces their effectiveness and can cost the business in the long run. The opportunity cost of manual processes can be high.
For smaller, regional insurers, these considerations are even more important as the markets they serve are hyper competitive. Historically, larger programs have been able to invest and experiment with these technologies and, consequently, they have been able to innovate their process and refine their strategy. This enables them to chip away at smaller, more regionalized insurers and capitalize on their customer base over time. Below are three reasons why these considerations are so important to the operations of an insurance company:
- More Vendors = More Flexibility – Flexibility is a critical component to an organization’s ability to remain competitive. By adding additional vendors to a technology stack, insurers can avoid the pitfalls of being single threaded in a technology solution. This forces each vendor to remain agnostic about how they integrate into your business and mitigates the risk by introducing multiple points of failure. Although a core solution will remain at the center of an insurance company’s IT stack, it won’t need to accomplish everything.
- Spending Money to Make Money – This adage still rings true. Contracts with 3rd party vendors come with a price tag and an evaluation is critical to understanding the total value they bring to the business. The hardest part of these decisions is articulating the genuine cost of doing nothing. Although there is a certainty in the status quo, we can’t blind ourselves to the potential upside of doing things a little differently. Vendor partners exist for the sole purpose of delivering additional value and can help unlock potential areas of growth within the business.
- Elevate Your Expertise – Continuing off the idea of “spending money to make money,” the purpose of nearly every integration is to streamline manual processes. Without them, teams are forced to operate at the surface level – emphasizing the “what” over the “why.” Integrations reverse this reality. By removing your teams from the tactical execution of these functions, they can instead focus on the strategic nature of these decisions. Take medical bill review (MBR) as an example:
Tactical Execution: Collection, assignment, and entry of medical bill repricing for each claimant. Manual addition of each detailed line-item to the claim file and additional manual execution of payments for claimants based upon the repriced bill. Adjusters are continuously entering data into the system and their capacity is unscalable.
Strategic Execution: Direct integration with an MBR vendor enables all the data entry to be managed by a data feed. All of the critical data is attached to the claim file, with an electronic version of the full bill attached to the transaction line. Adjusters are now enabled to review each payment with all of the critical data at their fingertips, and use the data in a dashboard view to better understand macro trends across all claims.
Technologists realize the opportunity that comes with a fresh implementation. For insurers, implementing a new core system enables them to unravel years, sometimes decades, of process and reimagine how they’re operating their business. The best core systems on the market will integrate seamlessly with multiple vendors, and enable customers to focus on what they do best…and outsource the rest.