ABCs of Insurance Accounting Outsourcing You Must Be Aware

Insurance Accounting Outsourcing can be advantageous for your agency if you are aware of its ABCs

Insurance accounting outsourcing provides flexibility to insurance agencies of any size. Insurers have tons of challenges to juggle with as queries, competition, and technology change the playing field. Come in insurance process outsourcing. A proven business strategy with steady market growth since 2003.

Insurance Business Process Outsourcing Core Markets:

1. North America
2. Europe
3. Asia Pacific (APAC)
4. Middle East
5. Africa
6. Latin America

As mentioned, insurance agencies must keep up with the changing market. There is no other way but to be flexible and have the ability to scale up. But what are these market drivers which outsourcing is the only way to keep up with?

Insurers Must Keep Up With The Following Market Drivers:

• Increasing customer demands for best-in-class service/products
• Competitive nature gives rise to improve operational challenges. Such as turnover ratio and activity
• Worldwide growth of the insurance industry drives the demand for outsourcing services
• Insurers give priority to customer experience

These drivers made outsourcing a viable option for insurers. The insurance industry can take advantage of the skill and technology outsourcing can provide. This is applicable for complex tasks such as accounting.

Insurance process outsourcing gives a competitive edge and flexibility for small to medium-sized insurance agencies.

If you are one of them, you must know the ABCs of this smart business strategy.

Access to Accounting Experts Personnel

When you choose to outsource your accounting tasks, you do not pass it up to anyone. You entrust this vital part of your business to people with accounting knowledge. Even experts that know their field from top to bottom. Your accounting service provider ought to have talents with accounting years of experience and education.

An outsource insurance accounting from the Philippines has staff that fits these requirements. College education level is a hiring need for the BPO industry in the country.

Additionally, an insurance agency of any size has unique accounting principles. So your provider must have talents knowledgeable on Statutory Accounting Principles (SAP).

Financial statements using SAP is vital to your insurance agency. Why? It provides an important insight into how your agency can pay out insurance claims.

Reports obtained using SAP give you a bird’s eye view of your agency’s performance. This also protects policyholders. Which is a merit attractive to existing and potential customers.

You Can Outsource Talents For The Following:

Insurance Accounting Services	Insurance Bookkeeping Services
Monthly/Quarterly/Yearly Financial Reports	Accounts Payable
Preparation Tax Authority Returns	Accounts Receivable
Management Reports	Insurance Data Entry
Payroll Processing Services	Carrier Statement Reconciliation
Fixed Asset Management	Maintaining General Ledger
Financial Analysis	Income Statement and Balance Sheet Preparation
Profit and Loss Statement	Tax Authority Reconciliation
Claims Analysis	Bookkeeper
Underwriting	Collections & Billing

 

Outsourcing frees you from the challenges of hiring and staffing for these services. Not to mention it is costly to go through the tedious recruitment process. Plus the salary of such staff must be on par with the industry. Accountants and bookkeepers do not come cheap.

Furthermore, another challenging aspect for an insurance agency is tracking tax responsibilities. This could be overwhelming. Especially if you have a small in-house team that are often engaged in non-core and core processes.

Your outsourced accounting professionals play an important role when it comes to taxation. They can create and provide you with error-free financial statements. Which you can always go back to when claiming tax deductions.

Tax Deductions Your Insurance Agency Can Claim:

1. Home Office Deductions
2. Professional Membership Dues
3. License and Certification Costs
4. Office Supplies
5. Advertising Costs

Aside from this, your outsourced accounting team can keep track of filing deadlines. They can prepare necessary documents when making payments for your agency’s income.

Insurance process accounting is a growing market niche for the global BPO industry. Thus you must look for specialists that can cater to your requirements.

Back Office Process Reduction

Insurance agency accounting is becoming a staple business strategy. This is due to the need to focus on product and service development.

As well as business process optimization. Which have a direct impact to earn profit and revenue. Plus to cater to customer experience is an emerging technique to stay in the competition.

Insurance agencies are the perfect business model to outsource. Why? Because you tread on a volatile economic arena.

Your business is in constant threat of market instability. Even climate change also affects your business. This factor contributes to the volume of insurance claims due to natural disasters.

Insurance accounting outsourcing gives you the ability to scale up or down. You can outsource insurance accounting based on what you need and when you need it.

Advantages of Outsource Insurance Accounting

• Faster Turnaround Time

This is especially true during the pandemic. This is a burden for insurance agencies who have in-house servers and paper documents. Insurers cannot go to their offices to retrieve documents and process claims.

This will never be a problem when you outsource. Your outsourcing provider uses cloud-based applications that are accessible anywhere in the world. You can access insurance files wherever you are even with the “stay at home” policy. No disruptions to deliver your clients the services you must provide.

Plus your outsourcing provider has security systems in place. This is to protect your data and your client’s sensitive information.

• Better Risk Mitigation

Your outsourced team of accounting professionals can work on the processing of your documents without delay. If you outsource to the Philippines, time differences can work for your advantage. This is true if your office location is in the west.

Accounting processes happen almost 24/7. The only thing you need to do is double-checking and quality assurance. This means faster time to deliver important reports and documents to your clients.

An error-free accounting report enables you to make sound decisions. Which can affect your business growth and scalability in the long run.

• Focused In-house Employees

As you outsource your accounting tasks, your staff can focus on what matters. This in turn will improve your employees’ business development ability. As they can improve processes for better client conversion. Also, they will have more time to manage customer relationships.

Cost-Saving

One of the main value propositions of outsourcing is cost reduction. You can gain the deliverables of accounting experts. Without going through the hassle of recruitment.

You also reduce operational costs as these staff operate offshore. Meaning they do not need your office space and business assets.

Additionally, outsourcing providers use tools designed for your market niche. Which maybe you are not using yourself in your insurance agency. Take advantage of an outsourcing provider’s technology and human hybrid process.

Outsourcing Providers Use Applications For Insurance Niche:

• Vertafore
• Nexsure
• Everspring
• InsurancePro
• Hawksoft
• IBM SPSS
• Halo
• Newton
• Agency Systems
• Insly
• Semcat
• A1 Tracker
• Jenesis
• Agent & Broker System (ABS)
• Sibro
• Agency Intel
• QQCatalyst
• Quickbooks
• Loan Assistant

Tips for Successful Insurance Accounting Outsourcing

Small to medium insurance agencies can take advantage of insurance accounting outsourcing. As this can stimulate productivity and growth within your agency.

The question is where to begin if you choose to outsource. Keep in mind the following key steps.

Outsourcing means Growth

Companies outsource for faster growth and innovative services. You can grow larger, gain market share, and hire more and different specialists that you need. Minus the cost.

The goal is not to fire your valuable staff. It is for them to use their time for things that matter.

You can have the best of both worlds. Your in-house employees’ best skills plus your outsourced back office support.

Systems and Security Matters

Information security is important, especially for insurance agencies. You must choose an outsourcing provider that is ISO-certified. Plus compliant with international standards.

They must have a quality management system in place.

This only means that their client information security matters to them. Financial statements are important information. You wouldn’t risk it over gross negligence.

Communication is Important

Go for an outsourcing provider that understands your niche market. A provider who understands operational challenges and industry objectives.

You can also check their staff’s educational background and years of experience. Including English skills of the staff, they will provide. This is to ensure that they have in-depth knowledge of how your industry works.

One more thing, outsourcing providers have a business development team. They will guide you through every step of your outsourcing journey. Clear and open communication is a sign your outsourcing partner would become an asset, not a pain. Always remember, you will always have the final say.

Ease of Implementation

A good outsourcing provider does not need you to change your system or processes. They adapt to it.

The learning curve will happen within your outsourced provider not with your agency.

You can check if your agency aligns with them. As you can ask the length of outsourcing implementation. Additionally, you can compare costs and ask for references to learn client experiences.

Economics

Before you do any outsourcing steps, you must examine your internal management first. Like, compute the total spending for your accounting tasks. For starters, you can compute how much it would cost you to hire an in-house accountant or bookkeeper.

You must also qualify how these tasks affect your employee performance. Then compare to the costs offered by your outsourcing provider.

Besides the financial gains, you can also expect significant intangible benefits. Such as adding capacity to your operation and documenting workflows.

Magellan Solutions Is Your Accounting Insurance Provider

We are 17 years in the industry built to provide accounting services for the insurance industry.  Magellan Solutions is ISO 27001-certified and HIPAA-compliant.

We take pride in how we manage information security. While we provide the services you need.

Contact us now and let our business development team be with you for a short while. This is the first step for your scalability and growth.

Fill up the form below for a free 60-minute business consultation!