Why Should MGAs Outsource Insurance Back-office Processes?

According to the International Risk Management Institute (IRMI), a MGA is a specialized type of insurance agent or broker who has been granted underwriting authority by an insurer and negotiate contracts for that insurer.

Binding coverage, underwriting and pricing, paying claims, and appointing retail representatives in a certain territory are all responsibilities that are normally performed by insurers. At its most basic level, the MGA administers all or part of an insurer's insurance business and operates as an insurance agent or broker for the insurer, acting as a conduit between insurers, agents, and/or insureds.

MGAs must focus on client requirements and provide them with complete solutions; however, while focusing on this, they usually get less time for insurance back-office management. Therefore, by delegating administrative tasks to a third-party insurance service provider, you can get more time for client servicing while ensuring efficient and smooth operations.

Here are some points describing some advantages of outsourcing insurance services for MGAs:

1. Process optimization

As an MGA, as you choose a reliable partner for insurance services, you get rest assured knowing they manage processes (including binding coverage, underwriting, pricing, policy issuance, commission management) efficiently and effectively. Basically, they ensure to streamline your processes, helping you run your insurance business smoothly.

2. Scalable solutions

Most established insurance outsourcing companies understand insurance business needs and how they change or grow. Considering that, they maintain their capacity to support quick scaling with a smooth transition. As your business grows, you will realize the need for necessary infrastructure, more employees, more office space, etc. Equipped with the latest technology systems and having a pool of experienced insurance professionals, an insurance BPO firm can accommodate your changing business needs via scalable services.

3. Fast turnaround time

We all know why time is a crucial element of any business. With outsourcing, you can improve the overall turnaround time for processes. In addition, many outsourcing entities have a vested interest in utilizing the latest technology to improve workflow and speed, which ultimately helps their MGA clients.

For instance, most BPO firms save their data in the cloud, enabling you (as a client) to access it anytime and anywhere that will save your time and improve your productivity.

4. Round-the-clock services

The 24/7 support will make it easier for the clients to get expert assistance whenever they want. In addition, the customer support team can clearly explain everything to them, making the insurance agent-client discussion a little less than usual, making the agent more efficient in performing other essential tasks.

5. Cost-effectiveness

Outsourcing firms provide services at costs that will sum up to be lesser than the cost of having an additional staff in-house. This helps agencies to save up to 30% in annual expenditure without compromising quality.

6. Time savings

As you outsource insurance back-office processes, you get yourself and your team free from various time-consuming responsibilities. The saved time can be better utilized for value-adding business functions, getting more time for overall business growth.

7. Focus on core roles

Outsourcing back-office operations, for instance, customer support, can help your agents enhance their efficiency. How? If you would notice, for insurance agencies that don't have customer support, insurance agents are always expected to be answering questions from clients as much as they could, but with the outsourced customer support team, that can be lessened. With this, they can put their complete attention to their primary jobs.

The bottom line

Being in the insurance industry requires you to have more extended patience. Not all clients have the same wavelength as you are; thus, a thorough explanation about the policies and coverage is necessary to make them understand it better. And probably that’s what you are best at. So allow yourself to keep doing your best by leaving all your back-office concerns to a dependable insurance BPO firm.