Transforming certificate of insurance management

Transforming certificate of insurance management for the insurance industry

Certificates of insurance (COIs) are critical for the insurance industry. These documents provide organizations that utilize suppliers to deliver goods and services with proof of insurance coverages and limits. While significant digital enhancements have been made in other areas of the insurance industry, the underlying process for managing COI issuance is still largely manual. It is estimated that there are over 400 million COIs issued annually in United States alone, and all of them are point-in-time and document-based certificates.

Introducing certificate issuance and management systems can address a part of these challenges. However, organizations, brokers, and carriers are often still missing truly transformative future-looking solutions that not only make the certificate issuance processes less manual and capital intensive, but also makes COI coverage information accessible to organizations and certificate holders on a real-time basis.

The three personas involved in certificate management:

Certificate holders and requestors: Organizations requiring products or services from the insured suppliers, who require suppliers to be adequately insured to reduce their own liabilities and exposures before the suppliers can be employed.
Insured suppliers: Organizations or individuals delivering products or services to the organization. They require adequate coverage to become eligible for carrying out operations with certificate holders and requestors
Brokers and insurers: Organizations providing insurance. They are required to share COIs with the insured and certificate holders when required or under specific conditions like policy renewal, cancellation, change, or expiration.

The challenges of relying on point-in-time COIs

Organizations often rely on a large number of suppliers to deliver products and services at a competitive price, as well as utilize their specialization in specific industries, domains, and practices. While many companies have proven methodologies for onboarding suppliers, their processes for collecting insurance coverage and renewal information may need improvements. Suppliers not having adequate coverage may leave organizations at risk of huge liabilities and exposures.

Organizations often do not have the means to track real-time coverage information, identify deficiencies, or be promptly notified in case of a lapse or change in supplier coverages. Since a significant portion of the process is still carried out manually, managing compliance can be a daunting and costly affair. It is estimated that organizations spend $15B annually on managing COI compliance alone, while supplier management processes cumulatively accounts for over $100B.

Correcting an ineffective and inefficient process for carriers and brokers

Carriers and brokers realize how important it is for their insureds to get COIs promptly, as this has a bearing on their business with their clients. While carriers and brokers continue investing in optimizing their processes, they may still lack the advanced analytics capabilities required to gather data from unstructured requests for COIs, or enable an ecosystem that shares coverage information in practically real time.

Relying on manually reviewing COI requests not only means deploying employees to support the process at significant effort and cost, it may also lead to Errors and Omissions costing millions of dollars in case the terms of the shared COI are not accurately read, interpreted, and incorporated.

The choice between developing and adopting

COI management for carriers and brokers and compliance management for certificate holders is an essential business process. Both of these organizations face choices between developing a solution for these challenges in-house or adopting management platforms.

Carriers and Brokers: COI management is a cost center. Some organizations invest in making the processes as efficient as possible with their currently available technology, platforms, and resources, as investing in a full stack advanced analytics solution and digital platform is seen as cost-prohibitive and posing adoption challenges from the insured, certificate holders, and other organizations that require Certificate of Insurance. Driving this adoption would enable identifying coverage deficiencies against certificate holder requirements, presenting the opportunity to increase net written premiums by making use of these insights.
Certificate holders and organizations that employ suppliers: Organizations that invest in a full-fledged digital platform may be able to drive adoption with suppliers. However, the process will still remain highly manual and point-in-time at the back-end if carriers and brokers don’t adopt. These organizations will be unlikely to do so without incentives. However, such a solution would allow them to make instantaneous decisions preventing any potential exposure or liability from supplier services lacking insurance.

The lack of advanced analytics capabilities to extract meaningful data from unstructured, semi-structured, and structured requests, coupled with the absence of a platform that creates an ecosystem between carriers, brokers, insureds, and certificate holders, presents an opportunity to provide a solution that benefits all stakeholders involved in requesting, sending, and receiving COIs.

This modular solution can be used based on the unique requirements of carriers, brokers, and certificate holders alike by enabling the exchange of coverage information seamlessly and in real time in order to realize significant operational efficiencies and cost reductions.

EXL and Certificial: Real-time insurance verification

EXL and Certificial have partnered together to create a real time insurance verification solution that enables carriers and brokers to convert non-standard requests into automated digital request, which can then be shared with insureds and certificate holders through Certificial’s platform.

This platform is augmented by EXL XTRAKTO.AI^TM solution, which provides analytics and pre-trained AI and natural language processing (NLP) extraction models coupled with Cloud infrastructure and integration. This helps accelerate deployment regardless of an organization size and scale.

This real-time insurance verification solution combines certificate issuance capabilities for carriers and brokers as well as compliance management for requestors. Together, this enables dynamic COI tracking in real time, as well as the identification of coverage deficiencies.

Teresi, Certificial’s CEO, spent over 15 years at ACORD, including serving as Chief Technology Officer during his last few years at the company.

"Real-Time verification provides a tremendous amount of operational efficiency for insurers, and ultimately lowers E&O exposure. We’ve added over 8,000 carriers, brokers, and agencies since we went live in January of this year, and hundreds are being added each week to begin issuing dynamic COIs",

Teresi says.

Blanchette was a Partner at a process transformation consulting firm, with clients that included many top carriers and brokers. Blanchette says, “Insurance is not static, therefore companies cannot simply rely on a document once a year. We went back to the drawing board and completely transformed this process to ensure that we can pass coverage information from where it originates directly to requestors.”

Raghav Jaggi, Senior Vice President and Global Insurance F&A and P&C Co-Leader EXL, says,

“We are excited to partner with Certificial. Together, we look forward to bringing to our clients an end-to-end certificate of insurance solution to service requestors real-time through certificate issuance, coverage monitoring, and compliance management across brokers, carriers and requestors.”

Conclusion

In every industry, customers expect their request to be answered faster than ever before. Insurers and brokers should concentrate their efforts on making COI management processes digital and augment by AI and ML technologies to ease the burden on their staff optimize workflows.

By adopting a solution that addresses the challenges in managing and monitoring COIs, brokers and carriers are able to drive the insurance industry forward. Brokers, insurers, and certificate holders who become early adopters of these technologies will gain a competitive edge in the market.