Insurance companies benefit in several ways by outsourcing the administration of claim processing to third-party specialist companies.
While the ability to keep selling attractive policies is fundamental to the existence of the insurance company, efficient claims processing is the bedrock of the company’s reputation. According to Deloitte, claims represent the biggest cost component for insurers, with payouts and expenses accounting for around 70% of the premiums collected. With the pressure always on to make claim processing more efficient, productive, and accurate, many insurance companies are turning to professional third-party insurance claim services providers. Some of the top benefits insurance companies can expect from claim outsourcing:
Reduction in Work Load
Claims processing is a backroom activity that supports the principal purpose of the insurance company, which is devising new policies and selling them. However, it is mandatory to set very high customer service standards, which may be difficult for the insurance company if it gets bogged down with backroom activities like claims management, data processing, and administration. It can be far more productive to outsource these activities and focus on their sales activities.
Reduction in Expenses
Insurance companies typically need to make large investments in infrastructure and manpower to handle the claims administration. The insurers can easily sidestep this investment by outsourcing the claims administration function to specialist third-party service providers like Phillips & Associates, Inc. of Madison County that have the resources and expertise. Insurance companies can utilize the savings better by devising optimized products for their audience and consolidating their market share. The benefits of outsourcing claims processing accrue throughout the year. You can visit them by following the map:
Claim Eligibility Assessment
Deciding whether claims are valid or not is one of the most critical tasks in claims administration! Often the nature of the claims can be very complex and require a lot of expertise, time, effort, and money to decide the liability of the insurance company. A casual approach to claim eligibility assessment can bankrupt the insurance company in addition to consuming huge resources. It is, therefore, far better to outsource claims assessment to specialist agencies. In the contemporary environment that is seeing an increasing number of claims due to natural disasters, terrorist activities, war, etc., claim assessment also needs adjusters to meet several legal and statutory requirements, as per applicable laws. Very often, it may not be possible for insurance companies to develop the required expertise in-house.
Quick Settlement and Disbursement
Customers expect that the settlement of their claims will be quick and hassle-free when their policies mature after many years or they claim due to untoward events. Because insurance companies may receive hundreds of thousands of claims simultaneously, they are likely to get bogged down in settling claims and may not be able to focus on the work of selling policies. Outsourcing claim administration to specialist agencies can help take this burden off the insurance companies and streamline the settlement process.
Insurance companies benefit in several ways by outsourcing the administration of claim processing to third-party specialist companies. They have more time to spend on their primary activity of increasing revenues and market share and can elevate customer satisfaction through more efficient and quick settlements.