When an insurer decides to outsource a service, it enters into a relationship that should be mutually beneficial. This relationship can work exceptionally well for everyone involved, allowing both parties to grow and profit, but only if it’s based on a foundation of trust. At least, that’s how we see it at Selman & Company.
One of the key services we offer is outsourcing. When a company comes to us to administer products or services that are not core to their business and bottom line revenue, we view this as a starting point for a long-term relationship. As such, we strive to understand the clients’ needs, and we adapt our service offerings to match those needs with customization and flexible solutions. To see what this means, we’ll outline three common challenges and solutions below, involving our port and conversion services.
Understanding Port and Conversion Services
Portability and conversion are two methods used to let individuals keep their insurance after leaving a group.
- Porting means that the individual keeps the same coverage but pays the premiums directly.
- Converting means that the individual switches from a group plan to an individually-owned plan.
Both methods let the insurer retain business while the individual retains coverage, but the process is complex. Strict deadlines, as well as state and federal regulations, can lead to high operational expenses and legal issues when the process is mishandled.
Because of these difficulties, outsourcing port and conversion services to an expert provider is often the best way to ensure that the process goes smoothly, premiums are retained, and regulatory problems are avoided.
Challenge #1: How to Capture Lost Insurance Revenue
Let’s say you’re an executive at an insurance company, and you’ve realized that the company is losing money due to lost premiums when individuals leave group coverage. You want to capture the lost revenue, so you look to port and conversion services. Without the experience and resources needed to manage the complicated process effectively in-house, you decide to outsource the program administration.
This is a common scenario. Sometimes, companies choose to start small, entrusting us with a narrow scope of services at first. This way, they can see how teaming up could benefit them by saving administration time and capturing lost insurance revenue.
Challenge #2: How to Adapt to Your Organization’s Evolving Needs
Now, let’s say that you’re a year into the relationship and your organization modifies the product offering under the group coverage plans, and that requires additional staffing and expertise. Through the existing partnership, you know that Selman & Company meets your administrative expectations, and has saved you time and money. So, it makes good business sense to expand your port and conversion administration outsourcing, and to have us manage the additional product offering on your behalf as well.
Because you already have an established outsourcing relationship, adapting to changing business priorities is easy.
Challenge #3: How to Avoid a Competitive Crisis During an Acquisition
As the old saying goes, the only thing constant is change. When big change happens, you need a partner who can work with you to provide flexible and creative solutions.
In the world of finance and insurance, acquisitions are par for the course. When only part of a business is sold, unforeseen implications can occur, especially when it comes to port and conversion services.
Imagine you decide to sell an individual insurance unit to a competitor while retaining the corresponding group insurance product. While this may seem like a non-issue at first, further analysis of the situation reveals a problem: converting the insurance when an employee leaves the group now entails handing the business to your competitor. Even worse, this may give the competitor a potential entrance to offer group insurance to your clients as well.
As your trusted resource, we can help. In this case, we would recommend that you design a new product to fill the gap. We would work with you throughout the process to keep costs down and to ensure that you stay compliant with regulations. If you no longer had the capacity to administer the product, we could manage that, too.
Planning for an Uncertain Future
You never know what the future will hold. That’s why you need a team you can trust to handle processes you can’t effectively and economically manage, to solve problems as they arise and to anticipate problems that aren’t even on your radar yet. A strong outsourcing provider can do this and more.
Learn more about Selman & Company’s port and conversion services by reading our white paper.