As the old saying goes, it costs money to make money. It’s no different for insurance companies. Operational costs, like people, technology, and infrastructure, stand as some of the biggest considerations for leaders across the industry. Second to these, are the losses incurred by claims throughout the year.
Minimizing both of these is a consistent goal for any program. As businesses digitally transform their business with new solutions to manage the entire life-cycle of a policy, what they realize is multifaceted. Key operational functions, like underwriting and claims administration, are impacted by reducing the amount of time spent performing manual processes, there-by reducing the operational cost of writing a new policy and managing a claim. Through streamlining the process, these individuals are able to be more strategic in their work; focusing on ways to better assess risk and trends across the business. Additionally, leaders are able to derive better insights into their business through the use of data and analytics.
- 10% reduction in the time spent performing the underwriting process – A 10% reduction in the time spent underwriting new business and renewals, affords a company many opportunities to better assess risk and reduce exposure year over year.
- 25% reduction in the time spent managing claims – Less time spent managing each claim, means more time focusing on how to reduce losses across the board.
- OPEX cost of $800 per claim – For 100 claims – a small amount of claims, typically reserved for a single person to handle – it costs a company $80,000.
- 1% reduction on loss ratios with analytics – Without access to their customer/client/member data, insurance companies can’t visualize the emerging trends that are nested within their historical performance.
What if you’re able to leverage data to better understand company profiles beyond simple loss ratios?
Are there specific customers, based upon a common set of correlated demographics, that have higher losses year over year?
Can you collect additional demographic information to better understand these profiles in the future?
Can you offer more targeted services to your customer base?
All of these are viable questions that can be answered through the use of a business’s historical data, all of which are unlocked through digitally transforming the core operations of the business.