Inefficient tasks are costing your brokerage valuable time, and as the saying goes, time is money. One area that is notorious for inefficient, manual, time-consuming tasks is the application and renewal process. In fact, handling applications and renewals can take up to 25% of the average brokerage’s energy and productivity.
So how much is inefficiency costing your brokerage?
According to the IIABA and Reagan Consulting’s 2018 Best Practices Study Update, brokerages with revenue up to $1.25M pay an average of $61,519 per employee in compensation and have an average number of 8.3 employees, which equates to $510,607 per year on total employee compensation.
If 25% of staff’s time is dedicated to the busy work related to collecting applications and renewals, then that’s $127,651 allocated towards manual processes that could be automated.
However, if this same brokerage were to cut the time spent on manual tasks related to the applications and renewal process by half (from 25% to 12.5%), that would equate to a cost savings of $63,825.87 – or better said, $63,825.87 could now be put towards much more productive brokerage efforts.
So how do you free up staff’s time? The answer is technology.
To better understand the renewal process and common pain points, Indio recently surveyed over 400 brokerages and their entire renewal process. Let’s take a look at a few key takeaways from the survey as stated in Indio’s State of Insurance Renewals eBook and how technology can help combat these issues.
Over 40% of brokerages servicing mid-market and enterprise accounts spend 11-30 minutes finding the correct insurance applications and supplemental forms to get their account's submission packet ready for renewals.
The amount of time that it takes for brokerages servicing mid-market and enterprise accounts to find forms isn’t surprising, considering that these accounts tend to require multiple applications and forms. However, the time spent searching for forms can increase inefficiency costs. If a brokerage has 100 customers and averages 15 minutes per customer finding supplemental forms, the brokerage wastes 25 hours per renewal period, which is valuable time that could have been spent on client-facing activities, such as advising.
To overcome these inefficiencies, brokerages should move the renewal process onto an easy-to-use client portal that both staff and insureds can log into at any time to track and fill out application and renewal forms. Rather than having paper or PDF renewal forms floating around an office or via email, a client portal stores and manages everything in a central location. This drastically reduces the time spent hunting for forms.
38.82% of brokerages servicing mid-market and enterprise accounts spend an average of 2+ hours per submission packet re-keying data and pre-filling information.
Rekeying data and pre-filling application forms are common practices for insurance brokerages, no matter the size or type of account. To make the process easier for clients, brokerages often pre-fill common information, such as the client’s name and address. Many brokerages with mid-market and enterprise accounts spend over two hours pre-filling data on supplemental forms. This indicates that the larger the client, the more client data these brokers have to work with, resulting in more time spent pre-filling forms.
To cut down on the time spent pre-filling forms, brokerages should consider using digital smart form applications. Unlike paper and PDF applications that must be emailed or delivered to the insured, digital smart form applications live online and include efficient features such as auto-mapping. With auto-mapping, common answers such as names and dates are automatically mapped from one form to another. Smart forms also include things like conditional questions, comments, directions, and e-signatures directly within the forms to make it easier for the insured to understand and fill out. Brokerage staff can then spend less time answering necessary, but time-consuming questions.
50% of brokerages in all brackets, regardless of their book of business, have brokerage employees spending at least 1-5 hours per week chasing down their clients to collect information.
Attempting to get applications back from clients traditionally requires extensive handholding. Email reminders are sent, phone calls are made, and brokerage employees head to the client’s office with paperwork. Brokerage employees also have no way of seeing the progress that clients are making with their supplemental forms. This results in double reminders, even if the client has already completed a certain form. The time that brokerage employees spend on reminder activities adds up. It also projects a certain image of the brokerage to the client. When clients are frequently contacted about administrative tasks, they come to view the brokerage as a transactional relationship rather than a trusted advisor. This perception makes it easier to switch to another provider as a deep, meaningful connection is absent.
To overcome this challenge, brokerages can use technology that automates email communication with insureds. As application deadlines approach, leverage automated emails so that reminders from your team automatically go out to insureds who have not yet completed their forms. Reminders can also be sent at an increasing cadence as the application deadline draws closer. This removes the need for your staff to sort and track who they need to follow up with, as well as manually drafting messages.
As you can see, the application and renewal process is inefficient and time-consuming – from compiling submission packets to chasing down clients for complete applications. These inefficiencies are costly not only for internal operations but also for the client experience. To remain successful and competitive, brokerages should embrace industry innovations, viewing technology and software as a complement to their application and renewal process, rather than a threat.