Making electronically stored documents legal tender has the potential to simplify the content management strategies of many large corporations around the world. However, Paul Mullon, marketing director of Metrofile, believes it could also cause some consternation, specifically in the insurance industry.
Managing documents is a fundamental process to any insurance company. To be able to make the decision on whether a claim should be paid or not, each policy document and all addendums and references to it need to be found and examined for any loopholes or clauses that could affect the outcome.
Electronic records can make this task easier as a simple click of the mouse retrieves all references to a person or policy. This beats trawling through filing rooms in search for records, especially when some policies may have a lifespan of decades (insurance companies are legally bound to keep records for the life of the policy, or longer).
While electronic document management looks good on paper, the business processes of insurance companies can cause problems. Most insurers work through brokers who sell policies on behalf of the company - a logical step as brokers are able to access a broader community of customers than the corporation can and provide a personalised financial service to each client.
Every one wins in this relationship: the brokers get good commission on the policies they sell while the insurance company has independent businesses pushing its products and brand. The relationship comes unstuck, however, when it comes to the issue of customer data.
Who owns customer data?
Brokers want to keep their customers to themselves, while insurance companies want the information on their books to maintain regular contact with people who are, after all, their customers as well. Now that the law forces companies to keep records and data for a specified minimum number of years, the issue of who owns which customer and where the data resides has become more pressing.
The insurers have to obey the law and want to keep all customer information they require, but don`t want to risk alienating brokers. Brokers, on the other hand, generally do not have the infrastructure to handle the administrative requirements necessary to meet legal record retention rules, but at the same time do not want to lose control over their customers by handing over their databases to insurers.
This conundrum applies to both electronic as well as paper-based records. Both need to be stored and indexed for quick retrieval where necessary, with the appropriately trained staff able to handle all document queries. Solving this issue is not something companies can procrastinate about - it is a legal requirement. Their first step, naturally the hardest, should be to decide which entity is ultimately responsible for these records and how the cross-over record requirements will be met if and when required in court or for claims settlement. Having everyone keep a warehouse full of records is not the answer as document management is not everyone`s core business.
Outsourcing records management headaches
The popularity of outsourcing this task to a specialist records management company is growing due to the complexities of compliance. A specialist outsourcer ensures that documents are safely stored and indexed for as many years as is necessary (and that they are destroyed after a certain number of years, as mandated by law). However, they also ensure that the documents are readily available should the originals be required - most records outsourcing companies can guarantee a four-hour delivery time.
The insurer or broker simply continues with their core business and request whatever documents are needed from the outsourcer. They can even store documents together, should they trust each other enough.
Alternatively, many companies make use of the specialist skills held within these records management organisations, but insist their documents do not leave their premises. This type of insourcing hands the management of documents to experts without taking the risk of having legal documents transferred out of the company - a team of professionals moves onto the corporation`s premises and manages its data in-house.
The conflict of interest between insurance companies and their brokers and agents is as old as the first brokerage. Legislation has served to focus these companies on the core reasons for the conflict: information, and more specifically, the precious treasure of customer data.
Data is the key differentiator for insurance as well as other businesses. Well-managed data, used correctly can result in growth and expanding markets, while data not properly managed can detrimentally affect a company`s operation, even causing it to fall foul of the law.
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Metrofile is the South African market leader in the management of business documents, and is committed to help customers reduce costs and improve productivity in processes that are centred on documents and corporate records.
All companies have a combination of paper and electronic documents, and are forced by law and customer requirements to secure the availability of the documents for the duration of their lifecycle. For most organisations, the volume of documents is growing at an exponential rate, and is becoming increasingly difficult to manage.
Metrofile is uniquely positioned to provide consulting and implementation of full lifecycle paper and electronic records management solutions from storage and conversion through to destruction.
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