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In the insurance industry, program monitoring is usually about tracking loss ratios and production figures—that is, the various aspects specific to insurance-related metrics. But program monitoring has many other valuable applications for an insurance organization.
Monitoring your marketing initiatives will equip your sales team with important insights. Tracking the implementation of a new underwriting strategy will benefit your underwriters. And of course, actuaries will be interested in all the data they can get their hands on. In addition to identifying areas to course-correct internal programs, you can also monitor competitor actions and industry trends to make sure you’re not missing a valuable marketplace opportunity.
Though all insurance companies are conducting some level of program monitoring, your initiatives might not be achieving their maximum potential.
Here’s how to strengthen the effectiveness of your programs.

Everything starts with quality data

As with most things in our industry, success boils down to the data. You can’t monitor your program if you don’t have detailed, sufficient data to capture relevant metrics, on both policy and sales sides. For a truly complete picture, you need front-end policy data as well as back-end claims information. Make sure you are capturing current, relevant data that populates specific reports with detailed objectives.

Involve all departments

Program monitoring is not always about making corrections– it’s about updating priorities and realigning business strategies. Reports can help you identify the problem, but can’t help you solve it. This is where your teams come in. Each individual department supplies an important perspective to help determine the best decision, so collaboration is crucial. All the areas of your business must work together to determine the ideal solution.

Useful suggestions

During our decades of providing insurance support services, we’ve seen what works–and what wastes time and resources. Here are some key techniques that have been proven to increase the effectiveness of program monitoring for insurance organizations of all sizes.

• DO automate reports so they are produced regularly with limited effort.
• DO prioritize analysis. Just because you generate the report, doesn’t mean anyone is analyzing it. Raw data is useless without a qualified analysis. 

• DON’T create so many reports that you can’t look at them. Ask your end users which reports aren’t bringing much value and eliminate those.
• DON’T get so detailed that the results are too volatile and impede drawing any useful conclusions. Instead, aggregate the data to a larger group or produce the report less frequently.

When to work with an insurance support services consultant

Designing effective program monitoring initiatives takes time, attention and expertise. Many insurance organizations simply do not have the internal resources available to devote to shoring up program monitoring processes. Companies specializing in insurance support services can speed up the process tremendously by filling in the gaps. Partnering with an experienced insurance operations consultant can reveal areas where you can begin to achieve results immediately.
While there are some useful software-based reporting tools on the market, these tools are limited in their ability to analyze the reports they generate. At Perr&Knight, we believe in the importance of creating effective program monitoring strategies that provide valuable insights for end users in every department.  By taking a close look at your managing entity, products and the jurisdictions in which you operate, Perr&Knight provides these services to elevate the effectiveness of your program:

• Designing strategies to automate report production
• Recommendations for metrics to evaluate regularly
• Illustrative sample reports
• Layout designs that are more meaningful to end user
• Peer review of report calculations or internal audits
• Data warehouse redesign recommendations

Effective program monitoring allows your company to track trends, identify problems, and reveal potentially undesirable results early. From there, you can address inefficiencies, correct errors or narrow the focus of your programs before getting too far down the line. Monitoring your programs allows you to track actual vs. expected impacts, which can enable you to make adjustments based on real-world impact. Review early warning or key indicator metrics regularly to ensure that your company stakeholders have the info they need to make intelligent business decisions.

For more information about how to make your program monitoring more effective, contact Perr&Knight today.

There’s a tendency in the tech world to go with the safe bet. Like the old adage says, “Nobody ever got fired for buying IBM.” But not only are insurance companies missing out on emerging opportunities from providers that are truly suited for their organizations, investing in the wrong technology or operations solution–even if it seems like a safe bet–can be crippling in terms of money and time spent.
During our decades of insurance consulting, we’ve seen what works and what wastes time. Here are our tips for conducting a vendor selection engagement that leads to success.

Tip 1: Determine what you want to accomplish

First, start by getting clear on what you’re trying to achieve with this vendor engagement.

• Take a look at your priorities:
• Are you trying to lower costs?
• Grow your customer base?
• Upgrade your user interface?
• Streamline your back-office operations?

Keep your goals in mind during every step of the process. Don’t become distracted by bells and whistles that don’t support the mission at hand.

Tip 2: Assess the big picture before you begin

As part of our insurance consulting intake process, we ask our clients, “If you look at all the pieces that make up your organization, from a tech perspective, where does what you’re trying to buy fit into that picture?” Then we literally draw a picture. What’s usually revealed is that this new piece of technology will interface with many more components than were previously realized. Keep these things top of mind as you proceed.

Tip 3: Gather your functional requirements

These are the actual functions that you’ll need your system to perform. We call them the “Thou Shalts” –as in, “The system shalt do X, Y, and Z…” Identify these items by speaking with staff to uncover areas of frustration, duplicate work or manual processes. Make this list as long as it needs to be and add to it as new requirements become apparent.

Tip 4: Conduct an internal readiness assessment

Take a hard look at your organization and determine if you’re actually ready to tackle a project of this magnitude, as these changes will likely impact every part of your organization. Make sure you have the appropriate staff in place and evaluate whether your new technology will be compatible with your existing teams, or if they’ll require additional training. If it makes more sense to undertake a project of this scope at a different time, adjust your schedule accordingly.

Tip 5: Look for deal-breakers during pre-qualification

Before sending out your RFP to a long list of vendors, be on the lookout for the areas where vendors simply cannot meet your criteria. For our insurance technology consulting engagements, we help our clients develop a pre-qualifying questionnaire that cuts right to the chase. Quickly evaluating at a basic level whether or not a vendor can meet your needs saves you from wasting valuable time on inappropriate partners.

Tip 6: Go beyond simple answers–ask for a narrative

As you down-select from 10-20 vendors, look for more than just simple answers. Ask open-ended questions that require a narrative around how their solution works. Ask vendors to outline their process, providing examples of real use cases and describing their approach to each scenario. You’re looking for a vendor who can clearly articulate how their solution works and how it has performed in situations similar to yours. Don’t be surprised if these responses run into the hundreds of pages.

Tip 7: Replace subjectivity with objectivity

Determine a system to compare apples to apples that eliminates personal or emotional bias. At Perr&Knight, we have created a numerical ranking tool that helps our insurance technology consulting clients evaluate proposals and assign a score. This enables companies to quickly eliminate vendors who don’t meet the minimum score requirements, while the most suitable vendors become immediately apparent.

Tip 8: Script your own demos

Once you have reached 3-5 final vendors to evaluate, write the script you would like them to follow during their in-depth product demonstrations. If not, the vendor will lead you through THEIR demo and focus on areas at which they know they excel, rather than what you need. This also allows you to compare vendors directly since they will each cover the same material. Don’t rush through these demos. Each should take around 2-3 days for you to obtain the complete scope of their capabilities.

Tip 9: Always have a backup

Your final down-selection should leave you with at least two vendors: the winner, and the backup. With so much at stake, keep your second-choice vendor in mind in case your prevailing vendor disappoints you, or to use as leverage during contract negotiations. Don’t close the door on the second-choice vendor until the ink is dry with your first choice.
Vendor selections are long, deeply-engaging processes that generally run at least 6-9 months. Take the time to conduct proper due diligence–on both your vendors and your own company–to make sure that expectations are clear and can be met by all parties.

Perr&Knight helps insurance companies select ideal vendors for all aspects of technology and operations. Contact us today at (888) 201-5123 x 3 and we’ll find the right fit for your organization.

Insurance companies are complex organizations managing multiple levels of service and product offerings, so there is always a risk of varying degrees of costly inefficiency. As experts in operations consulting for insurance companies of every size in every industry, we have developed tools to help carriers streamline their processes and start achieving greater value from their operations. Even small bumps in profitability can have a major impact, both long- and short-term.
In our experience providing insurance support services, we have discovered that there is plenty of low-hanging fruit that insurance companies can begin to capitalize on, beginning immediately. Here’s how.

Where to Start

You might be familiar with the Pareto Principle, also known as the “80/20 Rule”. This is the idea that 80% of your organization’s problems stem from the same 20% of root causes. Address these causes and experience exponentially improved results. This is especially true in the insurance industry since so many aspects of an organization are so deeply interconnected. Many insurance companies recognize that they have an efficiency problem but have no idea where to begin. We say: find the quick win and start there.
Take an inventory of your operational processes and separate your core processes from your supporting services. Your core processes are those that directly contribute to your customers’ experience with your company. Supporting processes are all the ancillary functions that surround your core processes.
Once you separate your core and supporting processes, create a ranking scale of core processes from least to most dysfunctional (i.e. those that cost too much, take too long, or receive the most customer complaints). Then rank the same items based on the amount of resistance you expect to receive when making change. Finally, evaluate your core processes based on the amount of investment (time or money) required to improve the process.
Find the processes that rank highest in dysfunction and lowest in resistance, time, and cost. These are your first priorities. By evaluating based on these criteria, you can reduce a list of potentially hundreds of areas for improvement to two or three that you can address right away. Once you have tackled the issues that are easiest to fix, you should move on to those that require deeper investments of time and resources.

The Power of People

As insurance providers, your business is necessarily financially-focused. However, keep in mind that at its core your operation revolves around people–your customers and your staff. During many of our insurance operations consulting projects, we see companies fall short of their process improvement goals because they forget to address the strong psychological component that surrounds change. The most successful companies carefully build staff buy-in before and during change implementation.

This can be done in a number of ways:

• Solicit input from staff about what they think needs improving and why
• Demonstrate the direct connection between their feedback and process updates
• Discuss proposed solutions before implementing to uncover potential resistance
• Provide sufficient training for new processes
• Establish clear goals and offer incentives for process adoption

Finally, remember that change takes place from the top down. Leadership must clearly communicate the vision and context for change, and must consistently reiterate this message until the change becomes institutionalized.

An Outside Perspective

Many companies contract an outside party to evaluate their processes and find ways to achieve greater value. This can reveal areas for operational improvement that have become so entrenched in an organization as to become nearly invisible. We recommend that you work specifically with insurance support services specialists, instead of a general business process management partner, due to nuances specific to the insurance industry. General consultants can only provide general advice.
Outside insurance operations consulting partners also bring discipline to the process. They facilitate communication between departments, gather and interpret organization-wide input and can act as a conduit to ensure that important information makes its way up the chain.
Whether you hire an insurance operations consulting firm to evaluate your hypotheses about whether a particular change is a smart investment, or you turn over the entire project for soup to nuts implementation, a third party can often be more effective in evaluating ways to uncover hidden value in your operations and helping you achieve it.
When it comes to process improvement, there’s an old saying, “Don’t try to boil the ocean.” That is, if you attempt to tackle everything at once, you’ll likely become overwhelmed and shelve the whole project. Instead, take a holistic look at your desired changes and how they impact your customers, staff and operations and start where you can make measurable gains right away. Remember that progress is all about incremental improvements.
Ready to find value in your everyday operations? Contact us today for a consultation.