2020 was undoubtedly a difficult time for everyone, but insurance companies were hit with costs from every direction.
The COVID-19 pandemic introduced unprecedented expenses and workplace transformations across all types of industries. Companies had to make accommodations for flexible payments and adjust to fluctuating demands. Workforces went remote, call centers were closed, and businesses had to react quickly, regardless of the associated costs.
These costs ran across the board, but most notably and notoriously impacted IT departments, where expenses have gone through the roof over the past year. Application development, management of countless devices, and additional licenses and technologies have all been added to the mix.
Insurance companies have been heavily affected by the pandemic, forced to deprioritize cost management to address more pressing demands, which has had a serious impact on profit-generating abilities.
It’s time to reflect – how will your insurance organization manage IT expenses in 2021?
Necessity: The Mother of Invention
More than a year into the pandemic, insurance companies need to achieve greater operational and financial efficiencies than ever before. On the cost side of the equation, analysts are recommending the centralization of expense management, creating a dedicated team within the IT department to develop and disseminate standardized best practices and evaluate expenses across the organization.
Identifying inaccurate billing from technology, telecom, and other vendors can avoid extraneous costs. Operating departments and business units need to cooperate in the increased vigilance, but need resources and technology that support all business functions, including quoting, policy management, billing and collecting, claims processing and more, in order to do so. To ensure immediate, clear information that everyone can process and respond to, analysts recommend prioritizing the use of dashboards over reporting, outputting intuitive visuals for analysis.
This is easier said than done, as it is a key structural change, both challenging and complex. Historically, operations and technology have functioned as independent departments, but as corporations evolve, so does the relationship between these two departments. To achieve efficiency gains, enterprises are beginning to combine the two, similarly to the DevOps union achieved in many industries. It is estimated that as much as 50% to 60% of traditional back-office insurance functions could be readily automated. Solutions in technology expense management (TEM) offer invoice loading and eBonding to drive this automation.
The Question is “Who?”
Organizational teams will need to share responsibility with the centralized expense management team (or implemented solution) to achieve the elimination of waste, control inappropriate payments and discover significant overall savings.
An intuitive "quick fix" to bridge the gap between functional teams may be to invest in a significant number of highly skilled (and expensive) individuals to develop the systems and methodologies. However, this is an unsustainable approach with slow movement (if any) towards ROI.
Finding a TEM provider that meets your complex and specific needs is the best approach. TEM solutions that offer well-developed automation and managed services deliver visibility and control that can optimize savings and help you thrive in the post-pandemic period.
Learn more about how TEM solutions can support your insurance organization and why Calero is the leader in innovative expense management technology.