Outdated processes are continuing to result in lengthy settlement periods and hinder efficiency across the insurance industry. New research from AutoRek has revealed that two-thirds of firms contend with at least 10 data sources or inputs to their premium payment process. Adding to this, more than half of all firms surveyed process over 10 million transactions annually, with an average of over 16.77 million. Although tried and tested systems like spreadsheets are being used to process these transactions, issues surrounding volume limits and the absence of audit trails are exacerbated.

The research report commissioned by AutoRek, a leading software provider to companies in the global financial services sector, sought the views of 250 managers, or above, in insurance and healthcare insurance organisations across the US. The research also revealed that a fifth (21%) of firms report that their premium receivables and allocation processes are currently ineffective, highlighting the need for a complete overhaul which requires adopting scalable automated systems and streamlining the back office engine room.

“Our research has identified a concerning trend. The volume and complexity of transactions is increasing at an unsustainable rate. With multiple sources and data formats, ensuring data quality becomes more and more difficult. The insurance industry is reaching a point where if they do not modernise and streamline their systems now, the cost and complexity of future upgrades will only grow as the pressure to adapt intensifies,” comments Piers Williams, Global Insurance Lead at AutoRek.

The back office engine room has long been overlooked in favour of front office investment, leaving insurers struggling with inefficiencies and complexity. However, there is a clear appetite for modernisation with over half of firms set to prioritise the adoption of SaaS solutions within the next two years, alongside investments in digital platforms and APIs (66%) and AI (82%). By modernising their back office operations with scalable, automated technology, firms can address challenges such as: improving operational efficiency (55%), accelerating cash flow and revenue recognition (50%), and reducing errors to enhance accuracy (48%).

These findings show that the insurance industry must follow suit with the rest of the financial services sectors and embrace technology to aid, enhance, or even replace their current outdated processes.