The benefits of using a digital data intake system for P&C insurance carriers
In an industry with small profit margins like insurance, efficiency can be the difference between turning a profit and operating at a loss. Yet many insurance carriers are still plagued with inefficiency issues. In fact, according to McKinsey, the insurance industry hasn’t increased its overall productivity in the past ten years. The low productivity shows in the numbers—experts estimate that insurers in the United States only earn a 1-cent profit from every dollar paid in insurance premiums.
While there are many factors that contribute to the lack of efficiency in insurance, one of the key elements is data management. Insurance is a traditional industry, slow to update legacy systems and entrenched work processes. It is also an industry that is highly regulated, requiring companies to collect and manage large quantities of data, much of which is sensitive. Managing that data properly is critical to remaining compliant and minimizing legal risk.
The amount of data that regulators require insurance carriers to collect has grown substantially in recent years. For example, the new International Financial Reporting Standard 17 Insurance Contracts (IFRS 17) published in May 2017 has led to a significant increase in data volume among insurers. The need to personalize offerings and provide better service is also driving growth in data volume. However, the growth in data volume paired with reliance on manual and unstructured methods for managing data has created a perfect storm that has contributed to the poor efficiency stats in the industry. Transitioning to a digital data intake system is key to overcoming this challenge.
Benefits of digital data intake
Implementing a digital data intake system can greatly improve productivity for insurance carriers. Let’s look at some of the benefits insurance carriers gain with digital data intake.
Insurers who haven’t implemented digital data intake often rely on manual data entry. Manual data entry is inherently inefficient since it utilizes costly human resources in repetitive tasks where they offer no added value. Furthermore, manual data is often siloed by location and business unit, making it difficult for employees in one part of the organization to access data managed in another. As a result, customers often end up being asked for the same information repeatedly, in every interaction with the insurance carrier. This causes frustration for the customer and leads to confusing duplicates within the organization. In addition, all manual processes are error-prone. When data is entered erroneously, it can lead to extensive delays and frustration for the customer.
Transitioning to digital data intake is one of the key ways in which insurance carriers can boost efficiency. First and foremost, digital data intake frees up limited human resources. It allows companies to utilize those resources in tasks that drive actual business value such as sales or customer support. Moreover, since digital data intake includes real-time validation, it essentially eliminates errors together with the delays and frustration they cause customers. This leads to faster processing times for insurance claims, and higher customer satisfaction overall.
Last but not least, when companies utilize digital data intake, the data is standardized and stored in the cloud making it easy for employees to access and breaking down the data silos that are so common in the insurance industry. Instead of requiring a customer to provide the same information in every interaction with the insurance provider, with digital data intake, every employee can easily access existing information for each customer.
Increased Accuracy and Security
Any process with manual touchpoints will have errors. Manual data entry is especially prone to error, but so are online PDFs and any other type of data intake that doesn’t include real-time validation. However, as described above, digital data intake includes real-time data verification, essentially eliminating the potential for error in data entry.
If a customer tries to enter data in the incorrect format or in a way that the system can’t process, they get an error message in real time, as well as user-friendly instructions on how to fix the problem. They can also upload digital copies of supporting documentation, which also helps to ensure that all of the information is accurate and expedites processing.
That’s not all. Security is always a concern for companies that deal with user data, especially when it comes to the sensitive information that insurance companies handle. When data is stored in various siloed systems and physical copies, it can be difficult to provide sufficient protection. However, when data is collected digitally in a standard format, it can be consolidated and stored according to the best security practices and technology.
And of course, when data is collected digitally, it is entered in a standard format, and stored in the cloud. It is synced in real time, allowing all parties to easily access the most up-to-date information at any time. It also makes it simple for customers to update their data whenever necessary.
Enhanced Customer Experience
It’s a new world of consumerism, and customers know that they have options. This is the case even in the insurance industry, which in the past could often count on lifetime customer loyalty. Today, that loyalty is not a given, making the customer experience more critical than ever before.
Part of the customer experience equation is processing speed. According to an Accenture study, insurance customer satisfaction directly correlated with the speed at which the claim was processed. By eliminating the need for repetitive data and manual data entry, offering user-friendly options to upload documentation, and validating data in real time, digital data entry speeds up various processes which in turn enhances the customer experience.
Another critical element in the customer experience is the ease of doing business. With digital data intake, insurers can streamline processes like insurance renewal, making it easier for customers to submit necessary documentation on their own schedule. And as in all consumer experiences, communication is key. Digital data intake can also help to improve communication between insurance carriers and customers, enhancing it with personalization, and omnichannel options.
Enhanced Agent Experience
People often make the mistake of thinking that digital data intake renders insurance agents obsolete. But the opposite is true—digital data intake actually enables agents to do their job better. Research shows that most consumers prefer a mix of self-serve digital and agent-based interaction. Rather than replacing agents, digital data intake frees agents to use their skills to better serve their customers.
When agents don’t have to spend their time on cumbersome paperwork, they can invest more time in building relationships with their customers, providing expert advice, and even selling customers additional products to meet their unique needs. Agents become advisors, rather than data entry clerks. Doing so allows them to improve their competitive position and write more premiums.
The benefits of using a digital data intake system go beyond improved efficiency and accuracy for the insurance carrier—they also enhance the customer experience and impact the bottom line. In an increasingly competitive insurance market, digital data intake is really the only way to stay ahead of the curve.
The benefits are clear. So, if you don’t have a digital data system in place, now is the time to consider implementing one to improve operations and better serve customers.
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