Insurance Best Practices

Proven Insurance Industry Leading Practices to Adopt

  • Best Practices (#172) / Insurance / Agency Operations

    Best Practice (Good)
    Use a centralized quote unit to rapidly respond to requests for insurance policy quotes by potential customers as they occur in the field.
    Typical Practice (Bad)
    Allow insurance agents to do the majority of work (data collection, entry and analysis) to provide potential customers with quotes.
    Benefits: Improves accuracy of quotes, reduces time needed to provide potential customers with quotes and frees up agents to work on more high value business development tasks.
  • Best Practices (#173) / Insurance / Agency Operations

    Best Practice (Good)
    Provide agents with incentives (shorter processing time, small additional payment) to use electronic payment and data delivery methods, such as receiving commission payments and confirmations electronically.
    Typical Practice (Bad)
    Allow agents to choose the compensation method (paper check or direct deposit) that best fits their needs, without providing any incentive to use one versus the other.
    Benefits: Reduces payroll cost and cycle time and avoids unnecessary calls from agents related to commission disbursements.
  • Best Practices (#174) / Insurance / Agency Operations

    Best Practice (Good)
    Develop a formal process to vet and onboard channel partners, taking into account factors such as reporting capabilities, company ownership background, IT systems (CRM, ERP, etc.) and overall customer service levels and support operations of the potential partner.
    Typical Practice (Bad)
    Allow channel management directors and staff to assess potential and current channel partners individually, using accumulated knowledge and experience to decide if they are a fit for the business.
    Benefits: Identifies possible risks with potential channel partners early on during the assessment process and helps to identify the "best-fitting," strategically valuable partners.
  • Best Practices (#175) / Insurance / Agency Operations

    Best Practice (Good)
    Ensure that all pertinent licensing forms are available to sales force employees (agents, brokers) online or through the company's intranet and notifications are sent when maintenance or renewal is required.
    Typical Practice (Bad)
    Keep licensing documents in paper-based form. Insurance agents and brokers are required to collect paperwork from adminstrative staff and fill out the proper documentation when renewal or maintenance is needed.
    Benefits: Online documentation is more readily available at any time and helps to keep licensing forms organized and up to date.
  • Best Practices (#176) / Insurance / New Business Processing

    Best Practice (Good)
    Fix insurance application data directly in the system, where possible, and push through rather than sending the application back to the agent or representative.
    Typical Practice (Bad)
    Send insurance applications with errors back to the agent or representative that input the application into the system for manual correction and resubmission.
    Benefits: Increase in overall originator uptime and producivity, and reduction of new business processing cycle times through a reduction of application errors and wastage rate.
  • Best Practices (#177) / Insurance / Underwriting

    Best Practice (Good)
    Create and distribute a standard checklist that can be used by the application requirements management team to ensure that all information requirements are met before sending an application to underwriting.
    Typical Practice (Bad)
    Route applications that have not fully met all data requirements to underwriting for review and return them back to requirements management.
    Benefits: Enforcing data quality and completeness standards for new applications reduces underwriting cycle times and improves customer service levels.
  • Best Practices (#178) / Insurance / Underwriting

    Best Practice (Good)
    Develop a standard triage process for underwriting incoming mortgage applications. Send simpler files through an automated underwriting system or an entry-level underwriter, while assigning more difficult cases to senior, experienced underwriters.
    Typical Practice (Bad)
    Assign incoming insurance applications to underwriting staff arbitrarily and allow them to use their experience and judgment to guide them through the underwriting process.
    Benefits: Improves underwriting cycle time and accuracy, and frees up senior underwriting staff to work on more complex, difficult underwriting tasks.
  • Best Practices (#179) / Insurance / Underwriting

    Best Practice (Good)
    Reduce instances of policy rescissions and post-claim underwriting activities by ensuring that insurance applications are completely clear to prospective policyholders and conducting a more complete underwriting process during the initial application phase.
    Typical Practice (Bad)
    Provide incentives to underwriters for the number of policies rescinded and claims denied. Carry out routine underwriting activities during the initial application process and then perform additional underwriting during the claims process to ensure that policyholders are eligible for claimed benefits.
    Benefits: Decreases expenses related to post-claim underwriting and premium refunds. Also improves customer service levels by reducing instances of policy cancellations (upon policy cancellation, all policyholder premiums are refunded and the former customer is forced to pay all remaining bills out of pocket).
  • Best Practices (#180) / Insurance / Claims Processing

    Best Practice (Good)
    Encourage and train claims adjusters to look for potential cross-sales opportunities and provide them with the tools required to generate quotes and quickly transfer policyholders to agents.
    Typical Practice (Bad)
    Encourage inside adjusters to find sales leads, even if they are unable to gather the information required to generate a quote or transfer the policyholder to an agent.
    Benefits: Improving claims adjuster sales capabilities can lead to increased sales opporunities and improved customer satisfaction.
  • Best Practices (#181) / Insurance / Claims Processing

    Best Practice (Good)
    Communicate standard, specific procedures and systems to all claims processors to identify suspicious claims and invalid data. Clearly define a process on how to detect and investigate claims that appear to be fraudulent or inaccurate.
    Typical Practice (Bad)
    Rely on initial training and individual claims processor detection skills to root out fraudulent or inaccurate claims during the claims evaluation process.
    Benefits: Reduction of overall claims expense through a decreased volume of inaccurate and/or fraudulent claims.
  • Best Practices (#182) / Insurance / Claims Processing

    Best Practice (Good)
    Create a repository of best practices for claims processing employees that can be easily accessed (through a company website or intranet), updated and even customized to fit certain product lines (personal vs. commercial lines, life, auto, etc.) and geographies.
    Typical Practice (Bad)
    Provide claims employees with yearly or quarterly face-to-face training sessions to discuss industry best practices and updates to regulatory requirements and/or local guidelines.
    Benefits: Reduces claims cycle time and improves overall customer service levels by implementing a system to use and improve upon claims processing best practices across the organization. Sharing best practices across the enterprise in this fashion can also improve the capabilities of claims employees without heavily investing in additional training or development.
  • Best Practices (#183) / Insurance / Claims Processing

    Best Practice (Good)
    Train auto claims adjusters and processing employees to collect any information related to other passengers in the vehicle during the initial claims submission process.
    Typical Practice (Bad)
    Following a collision claim, only gather information concerning the driver. Information on any other person in the vehicle can wait for a later time.
    Benefits: Collecting information related to additional passengers during the intial claim submission eliminates downstream work and reduces claims processing cycle time (which improves customer satisfaction).
  • Best Practices (#184) / Insurance / In-Force Customer Service

    Best Practice (Good)
    Design customer service job roles with the product knowledge and people skills required to directly follow up with customers for status updates, missing paperwork and problem resolutions.
    Typical Practice (Bad)
    Assign follow-up activities (missing paperwork, status updates, etc.) to front office field staff (agents, administrative staff) or to customer service personnel based solely on available capacity.
    Benefits: Designating certain qualified back office customer service employees to resolve paperwork and other policyholder issues frees up sales staff to work on business development tasks and improves customer service levels.
  • Best Practices (#185) / Insurance / In-Force Customer Service

    Best Practice (Good)
    Ensure that each product line offered by the insurance company (Life, Health, Property & Casualty, Group Benefits, etc.) has its own, dedicated customer contact center number and make the contact information easily accessible on the web.
    Typical Practice (Bad)
    Create a single point of contact for all customer inquiries and route them to the appropriate personnel based on the product line (Life, Health, Property & Casualty, Group Benefits, etc.), level of coverage, etc.
    Benefits: Reduces non-value-added work within the call centers by eliminating call routing activities between different product lines and improves overal customer experience by providing a product-specific contact number that is easily identifiable through the web.
  • Best Practices (#186) / Insurance / In-Force Customer Service

    Best Practice (Good)
    Employ at least one escalation representative for every fifteen lower-level call center representatives (CSRs). Provide lower-level CSRs with access to escalation employees through a text chat system to ensure that the call is worthy of escalation.
    Typical Practice (Bad)
    Only allow call center representatives to escalate a call if the issue meets certain pre-defined criteria. Have a limited number of escalation representatives on hand to reduce staffing costs.
    Benefits: Improves first call resolution rate and customer service levels by ensuring that an escalation path is always available if required. Also reduces average handle time by solving certain issues through text-based interactions with escalation representatives.
  • Best Practices (#187) / Insurance / Case Management & Settlements

    Best Practice (Good)
    Create a standardized assessment timeframe for case managers that dictates how often a policyholder's benefits should be examined to ensure that they are receiving the appropriate level of coverage.
    Typical Practice (Bad)
    Revise a policyholder's benefits structure only when a problem or complaint arises, or when the policyholder threatens to move to another insurance provider.
    Benefits: Improves levels of coverage and proactively fosters customer retention by preempting any possible issues that may arise related to levels of coverage and overall customer service/experience.
  • Best Practices (#188) / Insurance / Actuary

    Best Practice (Good)
    Standardize parameters for displaying actuarial valuation results for lines of business to prevent situations where areas seek unnecessarily customized views that are time consuming to create.
    Typical Practice (Bad)
    Lines of business will typically push for customized views of actuarial valuation results, as they do not typically have access to standard and comprehensive parameters for displaying data.
    Benefits: Preventing this customized work can reduce the level of effort to complete projects - sometimes by days or even weeks - and will reduce cycle times and free up capacity.
  • Best Practices (#189) / Insurance / Actuary

    Best Practice (Good)
    Create a formal governance program to ensure the accuracy, repeatability, sustainability and overall quality of actuarial models. Establish a formal list of models used.
    Typical Practice (Bad)
    Allow the Actuarial Group to develop their own models in desktop applications and various spreadsheets, without a single standard to govern their creation and documentation.
    Benefits: Ensures proper standards are followed for the creation, control, documentation and approval of actuarial models.
  • Best Practices (#190) / Insurance / Investments

    Best Practice (Good)
    When performing valuations on hard to value financial instruments (for example, over the counter [OTC] derivatives) use multiple sources, such as third party administrators and analysts, to put in place a system of checks and balances on valuation numbers.
    Typical Practice (Bad)
    Allow portfolio managers to split valuation activities between associates and analysts and use the data delivered by them to make decisions on final valuation figures.
    Benefits: Improves the accuracy of valuations and ensures that portfolio managers have a robust and comprehensive set of data with which to make decisions.
  • Best Practices (#191) / Insurance / Investments

    Best Practice (Good)
    Use a combination of technical measures, such as historical price and volume data, as well as fundamental measures, such as PE ratios, to determine the favorable price-points of a security.
    Typical Practice (Bad)
    Have researchers focus on a single strategy of investing that has worked for them in the past while ignoring other valuation techniques.
    Benefits: A plural research method can help to ensure that a portfolio has the right balance of long-term stability versus short-term leverage.

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