outsourcing insurance policy administration helps cut costs and raise quality
DESCRIPTION
TRANSCRIPT
![Page 1: Outsourcing insurance policy administration helps cut costs and raise quality](https://reader036.vdocuments.us/reader036/viewer/2022081907/54c37bb04a7959141b8b4584/html5/thumbnails/1.jpg)
wns.com – Insights – Blogs – Insurance Services Outsourcing
Outsourcing insurance policy administration helps cut costs and raise quality By Rajesh Desingu
When speaking with senior insurance officials in charge of policy administration, I cannot but help reflect that the challenges they face are not really new. Excessive paperwork, huge backlogs, sluggish workflows and neglected applications are historical operating challenges, yet they still keep coming up in conversations.
Added to these legacy operating problems is the challenge of managing multiple legacy systems – at times over 100 of them – which can make even Asok the programmer in the Dilbert comic strip blush. These problems often result in poor and inefficient customer service, not to mention significant costs to manage processes and systems.
Fortunately, these can be easily addressed by outsourcing policy administration processes.
Let’s look at the economics. Estimates suggest that servicing an insurance policy costs between USD 250 and 350 per year. Multiply that by the number of policies serviced – which tends to be in the millions – and the numbers are substantial. If the policy administration process were outsourced, these costs could be cut by as much as 50 percent which translates into significant savings for the insurer. It come as no surprise that policy administration and claims administration are two of the biggest functions that are outsourced by insurers.
However, cost reduction is not the only reason to consider outsourcing policy administration. Executives must ensure that customer service does not suffer in the bargain.
Our experience at WNS has, in fact, indicated that by outsourcing policy administration, defined service level agreements and guaranteed turnaround times can actually dramatically improve the quality of customer care.
Our experience in delivering policy administration for one of the world’s largest insurers underscores this point. Our client had bottlenecks in its processes resulting in significant error rates and longer response times. This obviously led to customer dissatisfaction. By delivering a customer-focused policy administration outsourcing program, WNS was able to:
Enhance customer satisfaction, improving it significantly from 76 to 88 percent
Improve accuracy by 8 percent and reduce customer-reported errors by 50 percent
Eliminate customer complaints for more than a year
Once the policy administration function improves cost-effectiveness and most importantly, customer care, the insurer can focus exclusively on other critical aspects of the business such as risk management and product profitability.
http://www.wns.com/Blogs/InsuranceServicesOutsourcing
Confidential © 2009 WNS Global Services | wns.com 1