“Corporate cholesterol” costing insurers billions

Inefficient business processes are costing insurers as much as US$10 per policy in waste, says a new report by Exigen Group. In the U.S., so-called “corporate cholesterol” amounts to more than US$2 billion, with insurers spending up to 30% more on processing claims, policies and customer inquiries than is necessary.
“Inefficient processes are like cholesterol in the corporate bloodstream. They slow you down and can have significant consequences for the overall health of the business,” says Jim Logan, general manager of Exigen’s insurance division. “Unfortunately, identifying inefficiencies and eliminating them is a complex task that spans multiple departments and, as a result, often gets delayed.”
Among the issues are duplications, bottle-necks and over-reliance on paper with symptoms including overflowing filing cabinets, data from one terminal having to be manually entered at another terminal, growing cost of compliance fines. Part of the solution, the study goes on to say, may be “business process utilities” which involve the aggregation of transactions in a single infrastructure shared by insurers, or by an insurer’s internal departments.
The research includes a guidebook, available at www.exigengroup.com.