Insurance companies request loss run reports for new insurance applications or during the renewal of their existing policy. These reports are required to get a more detailed look into the claims history of a specific policy. The more claims a particular policyholder has made, the riskier it is to underwrite them and grant them insurance coverage.
Insurance policies are renewed once every year. However, it can be difficult for an insurance carrier to renew these policies when millions of policies lapse on a daily basis. When a carrier has thousands of clients with multiple policies due for renewal, they have to delegate this work to their limited staff. If that isn’t enough, some clients even choose to try out a different insurance carrier when their renewal period comes around. All this work makes loss run processing a challenging, but necessary, task.
Insurance providers spend a huge amount of time attempting to obtain these loss run reports. This is because not furnishing them on time can result in agencies being blacklisted and banned by the underwriter. To ensure that these loss run reports are procured in time, many insurance agencies turn to outsourcing loss run processing services providers.
Outsourcing partners not only assist you with its analysis, but also help you review the documents to help you make a well-informed business decision. It is important to process and verify loss run reports quickly to result in successful conversions when servicing new clients. By outsourcing your insurance loss run processing requirements, you delegate your insurance back-office tasks to the professionals so that you grow your business in the process.
What Is Loss Run Processing?
Loss run processing is the essentially the generation of loss run reports. These reports contain the entire history of a policyholder’s insurance claims activity on a single policy. These reports are generally requested when policyholders are looking to switch insurance companies, renew their existing policies, or purchase a new insurance policy for the first time. Either way, once the policy period of 12 months has expired, loss run reports need to be generated for all insurance policies.
Tracking the history of a policyholder’s claims activities is important as it helps insurance carriers gauge how risky it is to insure a particular policyholder. The riskier it is to insure them, the higher the premiums you can get them to pay, if you choose to provide insurance coverage for them at all.
Loss Run Processing Services
There are many loss run processing services that are required by insurance carriers when issuing new or renewing old insurance policies.
Some of these include:
- Filing loss run requests with insurance carriers
- Extracting loss run data to assist with policy renewals
- Analyzing and reviewing loss run reports
- Preparing claims reports after thoroughly analyzing loss run data
- Keeping the underwriters informed of loss run reports that are not available
- Sending loss run reports to former insurers
- Disbursing loss run reports to insurance agencies and brokers
Benefits of Outsourcing Secure Insurance Loss Run Processing Services
Insurance agencies and brokers face huge challenges in tackling loss run processing by themselves. From gross human errors to not obtaining these loss run reports on time, there are many ways in which loss run processing can go south. Outsourcing loss run processing services to the experts, however, can alleviate these challenges. Let’s take a look at some of the most critical benefits that outsourcing loss run processing services can offer:
- Highly Qualified Professionals
Anyone can put in a loss run request but not many can get their hands on an actual loss run report when they need it. Insurance companies often play with their customers and purposely delay providing that information because they know that customers that ask for these loss run reports often go in search of new insurance policies with lower premiums and better coverage. To keep their business from moving to other carriers, insurance companies find any reason to not follow through with the request.
Getting a hold of your loss run report gives you the power to shop around for better insurance policies, especially if you have no claims history on record that will increase your premiums. If you have zero claims history, other insurance companies would be willing to give you lower premiums or greater coverage to get you to switch over. That is why outsourcing partners have highly skilled, trained loss run specialists on call.
These qualified professionals often have years of experience in only one field, loss run processing, so they know the ins and outs of the entire process. These experts will process your loss run reports with great efficiency and follow up with the required personnel promptly to ensure that no delays arise in procuring the paperwork you need. After getting your claims history, they then process the report to extract the loss run data needed for your renewal or to issue a new policy. After analyzing the loss run information, they then prepare the claims report and send it to the underwriters for further evaluation. Given their years of expertise in the field, outsourced loss run specialists get the job done without experiencing any complications that they cannot handle.
- Improved Business Growth
Getting your hands on loss run reports can be extremely labour-intensive as a lot of follow-up is needed with the insurance carrier issuing the loss run report. Because it is not in the insurance carrier’s best interest to efficiently process and send your loss run reports to you, they will stall the process and make up reasons as to why it cannot be generated right away. Though some states have industry regulations in place that prohibit carriers from sending reports after 10 business days have passed, it is not always the case that insurance carriers will follow these guidelines. To ensure that you get your loss run reports as and when you need them, you will need to outsource your requirements to outsourcing specialists in that domain.
Not only will outsourcing loss run processing result in you getting your loss run reports faster, it will also help boost your business growth. The faster your personnel can submit loss run requests and obtain the reports, the more requests you can process in any given day. You no longer have to deal with huge backlogs of loss run requests as your outsourced specialists are on it every second of every day. The fact that they are able to process more loss run requests per day means that your business volumes will only grow with time.
- Reduced Operating Costs
Loss run reports are difficult to procure because the process is quite labour-intensive by nature. Your own staff may submit loss run requests and have to wait days to get a response from the insurance carrier. The longer it takes to collect these loss run reports, the higher your costs will be as your staff will have to work on each report for more time. Your operational overheads will also increase if the volume of loss run reports that need to be generated grows with time. As you hire more staff to handle growing business volumes, the cost to the company of more salaries to pay will eat into your profits.
Rather than relying on your own untrained staff to handle loss run processing and hiring more personnel as business volumes grow, it is better to leave it to the experts. By outsourcing loss run processing, you will not need to incur as much overhead costs as these service providers operate from third-world countries. This means that they can provide the same service to you at a fraction of the price it would cost you to handle it from a first-world nation. By getting domain experts to process your loss run requests, you will not need to hire more staff or spend as much time dealing with each loss run request. This will cut your payroll expenses and reduce your overheads as these loss run requests are handled with greater efficiency.
- Modern Infrastructure
When you process loss run requests, you will need to work with the latest software to stay competitive in the industry. As technologies that are required for the insurance industry continue to evolve, your business will need to keep pace with their latest advancements and updates as well. This ultimately will cost you more money, especially if you decide to invest in all the technology infrastructure yourself. From upgrading your software to investing in more physical servers and other such infrastructure, there is no end to how much you can spend to keep your infrastructure up-to-date.
Outsourcing your loss run processing requirements, however, will save you from needing to make that investment upfront. Outsourced loss run specialists will have access to the latest technologies, processes, tools, and methodologies. This is because when outsourcing companies provide you with a service, their personnel will be equipped with only the most current, world-class IT infrastructure to make paying for the service worth your while. You will not even need to decide on what kind of staff or specialists to hire as that has already been determined by the offshore service provider. If getting the most innovative and expensive technologies for your operations is on your list of priorities, outsourcing companies may be a good option for your business.
- Secure Processes
It is increasingly becoming more and more important for businesses to keep their data safe and secure in a world driven by technology. The world’s smartest criminals launch cyber attacks on a second by second basis in the hopes of getting access to sensitive client information. If this information were to get into the wrong hands, it could result is massive financial losses. These losses would be for the business that was hacked as well as the people whose financial information was compromised.
Outsourcing to an insurance loss run processing services company helps you prevent any security breaches from occurring. This is because outsourcing service providers go to excessive lengths to ensure that their systems and processes are secure from cyber-attacks or threats of any kind. Some companies go as far as to sign non-disclosure agreements (NDAs) with their clients to ensure that all their data remains confidential and secure. When you partner with an offshore vendor you can be assured that they only use secure processes to process your data to prevent any security issues from coming their way.
- Rapid Turnaround Time
Loss run processing can take a lot of time depending on who is in charge of the task. This is because loss run requests need to be filed with the insurance carrier prior to obtaining any loss run reports. Moreover, once the request has been filed, a lot of back and forth will be required to keep the carrier working on your loss run reports. This is because insurance carriers only have a limited workforce and staff available to process volumes of requests every day. They are also known to take their time in generating these reports as that buys them more time with which to keep your business with them.
When you outsource your insurance loss run processing service requirements to the experts in that domain, you are signing up for rapid turnaround times. This is because outsourced professionals have great expertise in that specific area of insurance as they have been working with these types of requests for years, if not decades. Their deep domain knowledge allows them to work with the insurance carriers with greater efficiency and follow up with them in the right manner to get you your loss run reports on time. Their ability to process thousands of loss run requests per day with minimal effort is exactly why you are going to them for help.
Your only other alternative would be to delegate loss run processing to your staff and have them see how to get the reports, if at all. By trusting the experts, you can obtain your loss run reports in less time and get them to the underwriter’s desk a lot quicker than if you were to try managing the entire process yourself.
- Scalable Solutions
Businesses often face great challenges when it comes to increasing the number of files that need to be processed every day. Usually, the only way to increase the volume of files you are able to process is by hiring more staff or personnel to take on the extra workload. This can be a very expensive solution to a very simple problem, however, many businesses do not know of any other way around it. To ensure that you are able to keep up with business growth, sometimes it is advisable to bring outsourcing experts on board.
This is because outsourcing vendors often offer highly scalable solutions to your requirements. If you face larger volumes of loss run requests on a daily basis, outsourcing professionals can tackle those requirements in a matter of days. This is because you can increase the number of resources working on the task in minutes or days, not weeks or months like hiring additional staff would take.
When you are able to scale up your loss run report production in such a short period of time, you can enjoy greater profits. Scaling your bandwidth and resources up or down to keep up with rapidly changing business volumes is one benefit that only outsourcing can get you. Should you need to downsize your processing capacity, resources could just as easily be removed from the project to help you curb your costs.
- Greater Quality Control
Businesses often face a lot of challenges when it comes to knowing where to file their loss run reports. Because different insurance carriers will have different requirements and processes in place, it is important that you have experts on board that already have this knowledge on hand. Even if the reports have been properly filed, the accuracy of the details that each loss run report contains can be greatly off. When thousands of loss run reports need to be generated on a daily basis, there is always room for human error to creep in. That is why outsourcing your insurance loss run processing services to experts is a good idea.
Outsourcing professionals will have systems in place to audit reports for quality control purposes as their entire business rests on this one characteristic – accuracy. Without accurate loss run reports, underwriters will make huge mistakes in evaluating the amount of risk involved in providing insurance coverage for a particular policyholder. These mistakes will cost the carrier as more claims will be submitted than initially calculated, leading to great losses. By outsourcing, however, you can ensure that all your loss run reports have been intensely audited for quality so that all the details they contain are accurate. This is also beneficial as accurate loss run data will help you build a name for yourself in the industry.
As you can see, if done right outsourcing loss run processing to the experts can result in huge benefits. These benefits can range from greater quality control in producing loss run reports to more scalable solutions for rapidly growing businesses. You can also turn to offshore vendors if you are looking to speed up your turnaround times. Should you also want to be assured of data privacy and data security during loss run processing, outsourcing your requirements is the best way to go. Finally, if you value cost-effectiveness and access to state-of-the-art infrastructure on a budget, you can look to partnering with outsourcing service providers to truly boost your business performance.
Who We Are and What Makes Us an Authority?
Insurance Back Office Pro is an end-to-end insurance back office support service provider with specialized expertise in critical processes ranging from insurance policy checking and renewal summaries to loss run processing. With over a decade of experience in the insurance industry, we understand the minute details that are involved in providing successful insurance back-office support. We provide insurance loss run processing services that surpass industry quality standards to drive greater business growth for your business. Our detailed insights into the critical requirements of the industry makes us an industry authority, which means we have well-founded thought leadership in that department as well.