IRDA

Benefits of Outsourcing Recovery of Insurance Claims

Insurance Claims

Insurance claims recoveries are required when a recoverable amount arises due to a “not at fault” claim. This debt collection or recovery can be made internally or externally by a debt collection company. The major question is regarding the decision of the insurance companies to perform this complex debt collection process on their own or outsource it to a professional, and if they decide upon outsourcing, what shall be the benefits of outsourcing the Recovery of Insurance Claims.

The present article discusses the benefits of outsourcing the Recovery of Insurance Claims to help insurance companies in making a well-informed decision.

Outsourcing Recovery of Insurance Claims: Meaning

Outsourcing Recovery of Insurance Claims refers to the practice of delegating the recovery of insurance claims by an insurance company to another company having expertise in the claim recovery process.

Benefits of Outsourcing Recovery of Insurance Claims

The benefits of outsourcing recovery of Insurance Claims are given below –

Make the First Contact

Outsourcing the recovery of insurance claims can help the insurer to avoid the tedious task of location or skip-tracing or waiting two to three weeks for an answer to an undeliverable snail mail letter. The outsourced company work towards contacting the clients in a friendly and approachable manner conducting skip tracing in the event of the insured being untraceable, applying for police reports, licence or registration searches- all of the other tasks that can be time-consuming and deviate the focus of the insurance companies from the actual goal.

Dispute Resolution

One of the most time-consuming parts of the recovery process is dispute resolution. The at-fault parties will contest either the quantum or the liability, or both. All disputes are managed by requesting versions of events, obtaining witness statements, and communicating with third-party brokers, insurers, and other stakeholders[1] involved. The outsourcing of recovery of insurance claims can help in such a dispute resolution process seamlessly.

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Expertise

A good insurance recovery company have employees with expertise in the recovery of insurance claims as they are well versed with the trends in the insurance industries, the recovery procedure as per the Indian insurance laws and all other relevant information, thereby serving extension of the insurance company’s claims team, supplementing and streamlining the entire process.

They also provide debtors and other stakeholders with quick responses and manage the debtor’s relationship with the insurance company by acting as a liaison or “buffer” so that the insurance company doesn’t have to deal with potentially time-consuming calls and emails. 

Payments and Contracts

Debt collection agencies are experts at obtaining payment in full or as close to payment in full as possible. Otherwise, the collection agencies are usually set up with fully automated payment and arrangement processes, allowing them to track and report on instalments and repayment cases over time. 

Legal Assistance and Legal Proceedings

The outsourced companies also have an in-house legal department which can help the client, i.e. the insurer, to avoid any legal proceedings by providing the requisite advice or representing themselves in case any legal proceedings are initiated against them, which shall include the documentation, filing, representation and all other aspects involved in the legal proceedings.  

Saving Time and Money

One of the challenges insurers’ face is the time-consuming and expensive process of hiring debt collection experts. There can be a significant reduction in the claims costs by simply outsourcing the entire recovery function to a professional service provider. Claims staff can then focus on assisting the insured and completing the claims process without worrying about skip tracing or debt collection.  

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Recruiting a Debt Collector

Recruiting a debt collector can fasten the recovery of insurance claims as all the burden of the claim management with respect to debt collection is shifted to the debt collector.

Conclusion

Outsourcing the recovery of insurance from the start can allow the professional outsourced service provider to begin the debt collection process right away. Insurance companies go through cycles in which they outsource all claims recoveries from day one, which works extremely well. They in-source, with varying degrees of success, and finally outsource again when things go wrong. 

The professionals at Enterslice are well versed in the recovery of insurance claims straight from contacting the clients to the final settlement of the claim. The teamwork towards reducing the burden of claim management from the clients to help them focus on the key goals of the organisation.

Read our Article: Overview of Bonus Stripping & Tax on Bonus Shares under ITA 1961

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