An Insurance loss run report contains a record of all the claims a policyholder has made against his/her insurance policies. Policyholders have to provide this report to insurance carriers when they seek a new coverage or renew the current one.
It is quite similar to the credit score reports prepared by commercial banks to determine the eligibility of the loan seeker. Insurance companies study the history of the claims made by the business, to assess the chances of the business facing losses. If the chances are high insurance companies are likely to reject the application.
The loss run reports help the underwriter to assess the degree of risk associated with providing insurance coverage to a particular policyholder.
Loss run reports enable insurance carriers to measure the degree of criticality in the losses the insurance seeker has faced, and the number of times they have taken place. Insurance firms use this report to either accept or deny insurance application. It aids insurers to determine the premium amount to charge in case they accept the application.
The Top 4 Challenges Insurance Companies Face with Loss Run Reports
The process of preparing loss run reports is complicated and requires manual effort. It involves sending, emails, calling-up people, conducting follow-ups, etc.
The process becomes further complicated when an insurance seeker has a history of taking coverages from different insurance providers. Then the insurer is burdened with having to procure several loss run reports from multiple carriers. On this note, here’s taking a better look at the critical challenges faced by insurers with loss run reports:
1. Lack Of Promptness from Other Insurance Providers
When your insurance seeker has obtained coverage from other insurance firms, the process of preparing loss reports becomes a very long drawn one. Insurance providers are obligated to furnish loss run reports. But there is no law that obligates them to provide the report within a stipulated time.
As there is no profit attached to the issuance of loss reports, insurers take their own sweet time.
Insurers launch aggressive customer retention strategies to retain the customer for who they are supposed to generate a loss run report. This happens when a customer is a wealthy prospect. This results in a lot of delays in getting a loss run report.
2. Different Formats of Loss Run Reports
There is no fixed format of loss run reports in the insurance industry. Every insurance firm has its specific format for generating loss run reports.
This becomes a challenge for underwriters as they have to manually deal with multiple data in different formats.
The problem gets more severe when the insurance seeker has policies from multiple carriers. Then the underwriter has the complicated task of taking the data from all these separate formats and organising it under their own format. This results in a lot of delays and increases the scope of human error.
3. Limitations of Manual Effort
When insurance firms depend on manual effort to prepare loss run reports there are a lot of delays involved. A manual process takes a week or more to complete a single loss run report. This wastes a lot of time and money. It is impractical for insurance carriers to spend this kind of time and money on smaller insurance coverages.
Underwriters have the task of hunting for information from piles of paperwork and that too manually. This reduces their efficiency. It is also a waste of their valuable time and skills. The chances of the underwriters overlooking critical information are high. Such overlooking of information may prove to be an expensive mistake for an insurer.
4. Lose Track of Requests
Insurance agents send and deal with multiple loss run requests in a day. Typically, those requests are either via email or snail mail. This raises the possibility of an agent losing track of a particular loss run report. Such a single report may belong to a wealthy prospect and losing sight of such a prospect amounts to a significant loss for the insurer.
Agents require to constantly follow up with carriers for a single report. This is quite a cumbersome task for a single agent juggling multiple requests in a day.
How DO Insurance BPOs Adress These Challenges
It is not profitable for insurance carriers to have an in-house team dedicated to the process of obtaining loss-run reports. When this process is outsourced to a BPO, the insurance carriers can focus their resources on other core functions such as improvising sales strategies. Here’s highlighting how an Insurance BPO can help carriers handle the various issues related to loss run reports:
· Automating The Workflow
Insurance industry is an indursrty where process efficiency is necessary to achieve success. Manual work has the disadvantage of being more prone to errors. This is why most insurance BPO’s employ the use of automated technology to generate this report.
IPA (Intelligent Process Automation) helps to process this report. It automatically sifts through all documents and points-out the relevant data for the benefit of the underwriter. This automation tool decrypts loss run data across varying formats using it’s model’s with 500+million indexed points.
Reducing Overhead Costs
When insurance carriers conduct their loss run report processing in-house, they have to invest huge money in setting up and maintaining a team that is dedicated to this task only..
However, when they decide to outsource th processing of these reports to a BPO, they avail the services of a competent team at less than half the cost.
Since the demand for insurance is seasonal, the carriers can scale their services in response to growing demand. Insurance BPOs provide the advantage of state-of-the-art automation technology at no additional charges.
· Cutting Down Turnaround Time
When the insurer takes plenty of time to process the loss run report, the insurance seeker tends to lose interest in the insurer’s service. It is thus essential for insurers to reduce the TAT to submit and get the said report.
Insurance BPOs prove to be instrumental in cutting down this turnaround time by providing a dedicated team. The team takes full responsibility of processing the loss run reports. The team is well versed with the various international standards and best praticises.. This increases their efficiency in their job
· Improving Quality Control
The errors arising out of can cost the insurer dearly, as the underwriter may overlook a vital bit of information.
Insurance BPOs reduce the chances of an error occurring by having in place several quality-check measures like spot-checking and auditing processes . The experts at the BPO ensure that they clear all the doubts of the underwriters. Their contribution ensures that the outcome of risk assessment is accurate.
How Do We Help you With our Insurance Loss Run Services
Insurance Back Office Pro has vast experience in providing comprehensive loss run reports to insurance carriers all over the world. We have strategic contact with all commercial insurance carriers and agencies to provide you with reliable reports in the shortest possible time.
Our end-to-end loss run management process entails us getting in touch with the other carriers to obtain loss run reports. When we receive these reports, our experts evaluate their accuracy. They prepare a database of policies and categorize them according to the stage of their claims. We then prepare a customized report which highlights the risks. This report is then sent to the underwriter for processing. We interact with the underwriter to address any doubt he/she may have to ensure accurate risk analysis.
Our experts assist carriers to streamline their process of releasing loss run reports. Our reports contain detailed information about the loss incident which helps insurance carriers to make insightful decision making.
We have our in-house experts who accurately analyse the loss run report, which helps our clients to make timely decisions on renewals. We offer customized loss run processing services that can be scaled in response to your requirement. We work on cutting-edge technologies like predictive analytics to provide the underwriter with relevant and accurate information.
If a loss run report isn’t available, we submit a claims report, which prevents carriers from losing prospects due to a longer turnaround time.
Who We Are and What Makes Us an Expert?
Insurance Back Office Pro has over 8 years of experience in providing insurance back-office services to carriers across the world. Our 24×7 services to the carrier include assistance in setting up new businesses, policy issuance, loss runs processing, claims management, renewals processing etc.
