What Are Inefficient Tasks Costing Your Agency’s Bottomline??
Inefficient tasks are costing your agency time, and time is money.
To determine just how much money inefficiencies are costing agencies, we looked at an area within agencies that is notorious for inefficient, manual, time-consuming tasks; the application and renewal process.
In total, handling applications and renewals can take up as much as 25% of the average agency’s energy and productivity, from:
- Searching for and compiling documents for yearly renewals, to
- Hounding the client to make sure that information is completed and delivered on time, to
- Receiving incorrect information on application and renewal forms and having to track the client down again to correct the information
These are necessary activities, but they don’t add value to your agency’s bottom line. And the dollars spent on these activities can quickly add up.
How Many Dollars Are Spent On Lost Productivity?
Let’s look at how much inefficiency can cost an agency with $1.25M in revenue due to the repetitive, manual labor associated with the renewal and application process.
According to the IIABA and Reagan Consulting’s 2018 Best Practices Study Update, agencies with revenue up to $1.25M pay an average of $61,519 per employee in compensation and have an average number of employees of 8.3. That means a total of $510,607 per year on total employee compensation.
If 25% of the agency’s staff time is dedicated to the busy work related to collecting applications and renewals, then that’s $127,651 of the agency’s dollars allocated towards manual work that could be automated.
This is the cost of inefficiency.
If this same agency were to cut the time spent on manual tasks related to the applications and renewal process by half (from 25% to 12.5%), that would equate to a cost savings of $63,825.87— or better said, $63,825.87 could now be put to much more productive agency efforts.
How do you start freeing up this time? The answer is technology.
How to Reduce Inefficiency and Improve Productivity with Technology
The right technology doesn’t replace your agency staff’s job. Instead, by automating and speeding up manual tasks, it complements the work they’re already doing, giving them more time back to spend on client needs and relationships.
Technology can let them do things like manage all of their renewal forms from one central location, process information automatically from a smart form, send automatic email reminders to follow up with their insureds, and get application signatures back in a matter of hours.
There are many different ways that technology can help your agency get more efficient—here’s the rundown on just three.
1. Use a client portal to manage insureds’ renewals
Move the renewal process onto an easy-to-use client portal that both your agency staff and the insured can log into at any time to track and fill out their application and renewal forms. Rather than having paper or PDF renewal forms floating around an office or via email, a client portal stores and manages everything in a central location.
A significant advantage is that it serves as a one-stop-shop for the insured. Clients can use the portal to login and complete their insurance applications online, as well as perform a number of other activities such as sharing documents, updating schedule and exposure information, and signing forms electronically — right within one location.
The client portal is also a central place to collaborate. Agency staff can interact with the insured directly within the portal and view the insured’s progress filling out their renewal forms in real-time. Both the agent and insured easily work together within the same portal to complete the renewal process. This eliminates the need for the agent and insured to constantly participate in back and forth meetings, emails, and phone calls.
2. Implement digital smart form applications
Unlike paper and PDF applications that must be emailed or delivered to the insured, digital smart form applications live online and include efficient features such as automapping.
With automapping, common answers such as names and dates automatically map from one form to another. This reduces the chance that the insured will fill out forms incorrectly (a headache for agency staff who have to go back and forth to correct the errors).
Smart forms also include things like conditional questions, comments, directions, and e-signatures directly within the forms to make it easier for the insured to understand and fill out. Agency staff can then spend less time answering necessary, but time-consuming questions. They can also get completed, ready for market applications back from their insured in a shorter amount of time.
3. Automate email communication with insured
As application deadlines approach, leverage automated emails so that reminders from your team automatically go out to insureds who have not yet completed their forms. Reminders can also be sent at an increasing cadence as the application deadline draws closer. This removes the need for your staff to sort and track who they need to follow up with, as well as manually drafting messages.
Although the digital landscape has changed dramatically for the insurance industry, many agencies aren’t taking full advantage of technology, even though it’s more time- and cost-effective. Review the tools that your agency currently uses; determine if you can automate/streamline certain tasks or if you need to invest in additional technology.
Focus your efforts on value-adding activities
Time wasted within your agency isn’t only about how much money you could have saved—it’s also about how much your agency could have gained by investing that time in other areas. To improve your bottom line and efficiency, figure out if you can reduce the amount of time and energy that your team spends on collecting applications and renewal info.
No matter what size agency you are, you can also calculate how much you’re spending on lost productivity. Simply multiply your agency’s total employee compensation by 10% of your staff’s time spent on busywork. You might be surprised at how much inefficient activities are costing you.