How to Automate Insurance Renewals
When acting as a trusted advisor and partner to their clients, insurance agents are constantly looking for new tools to improve customer relationships and save valuable time. In recent years, automation has become a hot-button topic and a go-to strategy for insurance agents looking to build and manage their book of business more efficiently, particularly during renewal.
This article will detail some of the benefits of insurance renewal automation technology and how agents can incorporate it into their existing processes.
What is insurance automation?
Automation in the insurance industry refers to the use of technology to perform various tasks and processes that were previously done manually. It involves utilizing software programs, artificial intelligence and other advanced technologies to automate processes, increase efficiency, and reduce costs.1
Automation has become an integral part of the insurance industry, transforming traditional methods of doing business. With the help of automation technology, insurance agents can now streamline their operations and focus on more complex tasks. What’s more, by automating mundane and repetitive processes, insurance agents have more time to focus on building relationships with clients and providing personalized solutions.
How agents can automate the insurance renewal process
One area where automation is making a significant impact is in the renewal process. The insurance renewal process can be time-consuming and tedious, involving a lot of paperwork and manual tasks (e.g., collecting client information, preparing renewal quotes, creating policy documents, sending out renewal notices, following up on renewals, processing payments and updating client records). However, automation can help to simplify this process and make it more efficient.
Specifically, there are several aspects of renewals where automation can streamline traditionally laborious and tedious processes:2,3
- Collecting client information: Automation can be used to collect client information electronically, reducing the need for manual data entry. Not only can this save insurance agents time, but it can also improve the accuracy of client information.
- Preparing renewal quotes and policy documents: Through automation, insurance agents can generate renewal quotes automatically based on policy details and underwriting rules. Then, automation can be used to generate policy documents automatically based on the renewal quote and policy details, ultimately improving the consistency of policy documents.
- Sending out renewal notices: Automation can be used to send out renewal notices automatically via email or other electronic means, improving the speed of communication with clients. Further, automation allows you to set up a series of touchpoints, typically in the form of an email, text message or other digital channel, up to 60 days before the policy is set to expire through the expiration date.
- Following up on renewals: Automation can be used to track the status of renewals by implementing a system that automatically updates the renewal status of each policy as it progresses through the process. It can also customize reminders based on each client’s specific renewal status. For example, some systems can send out different types of reminders to clients based on whether or not they’ve received their renewal notice or have yet to respond to an initial inquiry.
- Processing payments: Automation can help process renewal payments automatically, reducing the need for manual payment processing. One of the top reasons people give for paying a bill late is forgetfulness.4 Automated billing and payment allow policyholders to pay their insurance premiums automatically without having to manually initiate each payment, adding convenience for the customer and improved cash flow for the business. A bonus benefit to this automated billing and payment is the cost savings. Insurance agents save on the administrative costs of processing manual payments, and policyholders can avoid late fees and other penalties.
- Updating client records: Automation can automatically update client records with any changes to policy details, payment information or contact information. This ensures that insurance agents always have the most accurate and up-to-date client information.
Benefits of insurance automation
The streamlined workflows created by implementing automation allow you to focus your time and resources on other areas of the business while continuing to deliver the best experience to your existing clients. When you build automation into your renewal processes, you may experience the following benefits:
- Improved data quality: When data input is manual, human error and inconsistency are unavoidable and sometimes very costly. Inaccurate data can cause increased risk, higher insurance premiums, decreased customer satisfaction due to longer processing times and claims denials, regulatory and legal issues, and damage to your reputation. Automation ensures standardization so that each task is performed the same way every time, reducing variability and inaccuracies in the process. This allows you to be more accurate in your risk assessments, policy building and communication with the client.
- Time savings: Without the right technology, approximately 30-40% of an agent’s workday is spent processing and dealing with paperwork.5 Suppose businesses rely on their people to manage all the data in their operations. In that case, they are pulling them away from other crucial, money-making activities (e.g., marketing, onboarding and providing education and training to existing clients).
- Centralized client information: Automation software can be integrated with your customer relationship management system to centralize and organize client data. With real-time updates on client data (and a hub where authorized personnel can access a client’s policy details or claims history), your team can deliver timely and impactful customer service.
- Better client experiences: Beyond timely reminders that help them avoid delays in coverage, automation can provide a more simplified, personalized process for clients. For example, clients can choose how they would like to receive reminders—whether via email, text message or phone call—and select the frequency of reminders. Policy details can be easily available for review and completion when they are ready to renew.
- Cross-selling opportunities: Automation can create cross-selling opportunities by identifying customers who may benefit from additional coverage or policy upgrades. This can lead to increased profitability and revenue for the agency.
What happens if we keep our processes manual?6
In today’s fast-paced business environment, automation has become critical to streamlining operations and improving profitability. This is especially true for insurance professionals who face multiple challenges in the renewal process.
One of the most significant risks of not automating the renewal process is losing potential customers. If clients forget to renew their policies or find the renewal process difficult, they may lose interest and switch to other providers. Additionally, inefficient collections, billing and follow-up can lead to increased inquiries from clients. This can result in increased volumes in customer service, leading to longer wait times, frustrated customers and potential reputational harm.
The implications of inefficiencies in the renewal process can be significant. By automating the renewal process, insurance professionals can streamline operations, reduce costs and improve profitability—all while enhancing the customer experience and potentially improving retention rates.
Don’t get left behind
Automation has become an essential part of the insurance industry, transforming traditional methods of doing business. Insurance renewal automation provides a range of benefits for agents, including improved accuracy, reduced turnaround time, increased customer satisfaction, centralized client information and cross-selling opportunities. By incorporating automation technology into the insurance renewal process, agents can save valuable time and resources while continuing to deliver the best experience to their existing clients.
Billshark “Top Reasons for Late Bill Payments and How to Avoid Them,” 2022.
McKinsey Digital “Automation at scale is driving transformative change across insurance,” June 9, 2017.
The information included in this article was obtained from sources believed to be reliable, including subject matter experts, to help users address their own risk management and insurance needs. It does not and is not intended to provide legal advice. Nationwide, its affiliates and employees do not guarantee improved results based upon the information contained herein and assume no liability in connection with the information or the provided suggestions. The recommendations provided are general in nature; unique circumstances may not warrant or require implementation of some or all of the suggestions. Nationwide, Nationwide is on your side, and the Nationwide N and Eagle are service marks of Nationwide Mutual Insurance Company. ©2023 Nationwide.