Why choose a digital TPA to administer discontinued insurance products and lines of business?

The management of your insurance company decides to exit a product or line of business. Your boss appears in the doorway and informs you that you have been “chosen” to manage the run-off policies. Your initial thought is “why am I being punished?”

When an insurance company decides to exit a certain line of business or discontinue a product, it does so for a number of different reasons. However, the company will likely reassign resources from the discontinued product to other newer products or services, it isn’t abandoning its policyholders.

Despite diminished resources, as the manager of the run-off business, you will be expected to maintain certain service levels and conform to the company’s customer engagement strategies, many of which will include the incorporation of digital technology. If the expectations are high, the challenges will be even greater:

• Systems—despite the growing pressure to increase customer engagement and provide digital alternatives, insurers typically don’t invest in or update technology for a discontinued product or business.
• People and staffing—once a decision is made, key employees will leave for positions inside or outside of the company, and finding talented people to fill vacancies for a discontinued product may become difficult.
• Resources—as the number of policies for a discontinued product starts to decrease, you’ll likely see a proportional decrease in budget. You will eventually find yourself being tasked with having to deliver Cadillac services on a smart car budget.

As a result of these challenges, business leaders are constantly on the lookout for solutions to manage these challenges, with many insurers turning to third-party administrators (TPA) to overcome the operational and administrative hurdles. TPAs provide greater expense certainty as the services are typically obtained on a variable or semi-variable basis, allowing expenditures to be proportional to the work performed.

However, not every TPA is created equally. Most administrators can handle basic administrative functions, but only a digital TPA can provide the customer service, flexibility, and automation that most insurers expect for their run-off business. When looking for a digital TPA, an insurer should focus on the following:

• Omnichannel customer engagement—traditional mail and telephone is old school, customers now want to communicate via portal, chatbot, and SMS. The way your customer engages tomorrow will include technologies that have not been identified today. A digital TPA constantly improves its customer engagement technology to keep up with the latest customer expectations.
• Robotic process automation (RPA)—leveraging RPA can decrease turnaround time, increase efficiency, and reduce operational errors and claims leakage. A digital TPA must always look to increase its automation capability in order to increase savings and improve customer service to policyholders and claimants.
• Flexibility—while the needs of insurance companies varies, a digital TPA is flexible enough to meet a particular insurer’s needs. For example, some insurance companies have advanced digital customer engagement strategies, and the job of the digital TPA is to compliment this strategy without creating a separate, non-integrated process.

Leaders of discontinued business face many challenges and an abundance of difficult decisions. Partnering with an experienced and qualified digital TPA can relieve much of the uncertainty that accompanies managing a run-off product or line of business.

To find out more about how our IBAS solution can help administer your discontinued insurance products and lines of business, contact: howard.ehrlich@capgemini.com

Click here to learn more about how Capgemini’s IBAS (Integrated Business Administration Services) provides an integrated technology and operations platform for Life and Health insurers in the North American market.