Insurance Records Management
Insurance Industry Burden with High Cost of Document Retention, Storage and Destruction
Insurance Industry Overview
The insurance industry is one of the most paper intensive industries. There are endless forms to file, copies of proofs to be preserved, and claims to deal with on a regular basis. Under the circumstances, using simple word processors, unsecure repository and emails or not adopting a streamlined process of document management can have serious negative consequences.
Being a data-driven industry, insurance companies must be careful with their documents. They are responsible for taking care of enormous amounts of documents such as policy applications, contracts, customer proofs, policyholder agreements, claim forms, PIP & HCFA forms, etc.
Adopting technological solutions for converting paper documents to digital files can reduce the turnaround time of solving customer queries from standard 24 hours to less than a minute. Not to mention, the average office worker still uses approximately 10,000 sheets of paper a year and according to The Paperless Project, American corporations “spend over $120 billion on printed forms, most of which become outdated within three months. (Forbes: Going paperless) https://www.forbes.com/sites/forbestechcouncil/2020/04/02/going-paperless-a-journey-worth-taking/?sh=3223d0715ca1
Insurance document management and storage technology allows individuals to manage documents efficiently and securely, and at the lowest possible cost in terms of both direct expenses and personal productivity.
When you are not prepared or organized:
- Ad-hoc document storage and/or an unorganized or misuse of your document retention policy results in many search hours and unnecessary storage dollars wasted. Every relevant document should be scanned and made available to authorized staff, which often does not happen under the circumstances
- While some documents can be shared with some users, some cannot be. Lack of user and/or group-based security rights can lead to security breaches and unauthorized use of data
- Without a centralized repository, employees do not have access to latest versions or files and need a longer turnaround time to answer customers
- Outdated communication and sharing methods translate to lost time, productivity, and reputation
- Document alerts and reminders – when a document alert system is not maintained or followed, companies can fail to inform customers about policy renewals and other events. With a powerful document alert system, even if a junior executive calls a customer, he can have all the information he needs on fingertips
- Keeping up with new data every day, including new applications, claims, policy changes, quotes and other administrative paperwork takes up your staff’s valuable time. And, it can be challenging to keep up with constantly changing regulations, including HIPAA, AML, GLBA, and the Sarbanes-Oxley Act
Cohesive technological solutions
A good technological solution will:
- Improve your performance, business processes and services, reduce operational costs and boost profitability
- Reduce the risk of misuse of yours and your client’s documents. A lost document is worth, on average $350; large organizations lose a physical document every 12 seconds, according to iSustainable Earth
- Process applications and customer requests more efficiently
- Meet regulatory requirements
- Should include an easy search function, metadata, reminders, version control, security, and audit trail
- Should give you the option to retrieve digital files through an online cloud storage repository, ensuring your information is accessible whenever you need it
Automate content classifications
Even though we all handle a ton of files every day, very few of us know how sensitive they are, where they are in the content lifecycle, or the policies that apply to them. Classifying files reduces risk and enhances productivity because the right file always adhere to the right policy and users do not have to constantly think about what the rules are for working on the files going through their everyday business processes.
One option and resource would be to hire specialists that are experts in document management systems. They can help you design a secure retention and destruction program so you can manage your physical and electronic records throughout their lifecycles. Automated disposition policies facilitate timely, consistent disposal of data following the industry state and federal laws.
- Help you maintain the privacy of your client’s records and reduce your risk of fraud, theft, and legal fines
- Maintain compliance with all applicable state and federal disposal laws
- Lessen the risk of data breaches with shredding and hard drive destruction options
- Set the right retention schedules and alerts, helping you maintain compliance with state and federal regulations
- Control storage costs
- Reduce time spent in regulatory audits
- Give you the right balance between automatically purging content that no longer has value, restricting permanent deletion to authorized users, and empower users to restore in the event of accidental deletion
- Have shredded materials recycled to support your firm’s sustainability efforts
Cost of using an outside vendor storage space:
- Document preparation (removing staples, paper clips, tape, etc.)
- If you have double-sided documents
- Indexing your boxes or documents for easy retrieval and tracking
- Added security measures to make sure classified or critical documents are secure
- Various types of retrieval options to fit with your business needs, including emergency retrieval, next-day retrieval, regularly scheduled retrieval, and more
- Pickup services for documents that might need to be archived regularly
- Access to your documents whenever you need it
- Storing and retrieval of backup systems for your business (tape rotation and vaulting)
- Proper, secure document disposal when files or records have passed their necessary document retention times. According to Inside Counsel – http://www.insidecounsel.com “it can take $143.49 to destroy a box of records” and it is even more when you consider the labor and time costs of organization, shredding, disposal, etc.
Over time, failing to destroy records you no longer need results in unnecessary storage costs. In highly regulated industries, the consequences can also include regulatory violations, fines, and reputational damage to your business, such as losing client policies, or failing to hold on to documents for the required timeframes.
Examples of insurance document retention timelines would be:
- Occurrence-based Policies – kept indefinitely
- Property policies – six years
- Claims-made policies – six years after the tail expires
A document storage and destruction program is a major transformation initiative. Companies should consider creating a task force representing all the teams and work processes involved. Depending on internal resources, the organization will need to either assign the implementation team or, in some cases, decide what outside resources would be required.
The move toward document digital automation is full of benefits for virtually any business, especially for organizations that are highly reliant on forms and contracts, such as insurance, healthcare, financial services, law firms and government. It would be fitting for every business leader to investigate just what they can achieve by accelerating the journey to a digital document storage and destruction system.