The insurance industry, in the last few years, has undergone a significant paradigm shift. The rise of Insurtech, increased focus on data, new entrants, changing regulations, and growing customer expectations are factors that contribute to the ongoing transformation. When it comes to insurance operations, policy management serves as the foundational infrastructure that underpins the industry. In a traditional setup, managing insurance policies can be a complex and tasking undertaking. The manual nature of these operations makes it time-consuming and prone to errors, leading to delays and increased costs. These are just a few common challenges faced by insurers. Let’s uncover the entire picture as we go through the common challenges in policy management and how leveraging the best policy management software in insurance can help.   

• Inaccurate Underwriting 

In a traditional setup, underwriters often struggle to collect information from a variety of sources and then ensure the gathered data is accurate and consistent. When the insurance business relies on disparate systems to store data, underwriters have to cleanse and re-enter volumes of data manually. This often requires them to connect with the customer to re-obtain the information. Further, legacy systems and processes usually cannot be integrated with third-party data sources. When processes are handled manually, the scope for human error increases. It also leads to a lot of back-and-forth and ultimately impacts service delivery.  

With a well-integrated insurance policy software, organizations can transform underwriting. The software can easily incorporate new data sources to enable informed underwriting decisions. Further, the data analytics and reporting capabilities of the software can help insurers identify bottlenecks and make subsequent changes. It also eliminates redundant work and improves underwriting capacity. Since insurance policy administration systems automate data collection and sorting, it reduces the scope of error. By leveraging quality data obtained from an array of sources, insurers can rapidly roll out new products and digitize the end-to-end customer lifecycle.  

• Delayed Resolutions  

Efficient insurance policy management helps ensure there’s a minimal gap between the reporting of a loss or incident and claims resolutions. However, manual processes and poor handling of data can delay the time taken to settle a claim. Claims settlement is a complex process that involves significant paperwork, data collection, and expertise. When a claim is filed, it gets assigned to a loss adjuster who produces a report. In this process, witness statements, medical records, receipts, invoices, policy copies, etc are required. The claim is settled when all the documents have been collected and verified. When done traditionally, it can take weeks, leading to customer frustration.  

Insurance businesses can fast-track claims settlements by leveraging automated solutions. Armed with a modern policy lifecycle management software, insurance businesses can capture claims digitally, collate the data from a unified database, and make a damage or loss report in no time.  

• Inefficient Policy Drafting 

Drafting insurance policies is a complex and arduous task as policies need to cover all the bases in case of lawsuits or large claims. Since policy drafts are comprehensive, at times underwriters may miss out on certain clauses or add incorrect quotes, leading to inaccuracies. To ensure efficient and accurate drafting of policies, the insurance business may have to employ more staff, resulting in a slow process that will ultimately lead to poor customer satisfaction.  

To streamline policy drafting, insurers can leverage automation. By using insurance policy administration software, customers can access the forms digitally and choose the cover that interests them. It allows customers to furnish the relevant documents to support the policy drafting.  

The policy and procedures management software can then automatically leverage the data offered by the customer for creating policy documents involving all the relevant clauses and covers. These systems can also calculate premiums. When the customer is satisfied with the policy, they can use digital signatures to sign the document and make the payment digitally. Not only does it allow insurers to sign up new customers more efficiently, but it also helps existing policyholders with policy renewals.  

 

Conclusion 

Insurance policy management is a complex and arduous process that involves a lot of resources. By leveraging the best policy management software in insurance, businesses can streamline and automate policy processes. This relieves the employees of repetitive and tedious work and enables them to focus on value-adding activities. Apart from that, it allows insurers to generate quotes, draft policies, and fast-track resolutions. It not only improves operational efficiency but also drives customer satisfaction and loyalty.