Vendor Management Challenges For Insurance Industry | Flentis

Technlogy

Vendor Management Challenges For Insurance Industry

Published

on

 

The financial services sector is a fast-evolving sector due to its clientele across the globe to the remotest areas. Among all the departments in this sector, insurance has gained the interest of one too many. Insurance companies are high-risk businesses because of which the eyes of cyber hackers remain glued for easy access to these companies’ IT infra. As the industry has a long history of outsourcing services, SaaS offers unique benefits and assists in getting tangible outcomes. 

It is also an eminent fact that the insurance industry faces multiple daily challenges. Let’s understand how technology like VMS can help companies belonging to the sector to leverage the system in overcoming some of the commonly faced vendor management challenges and thrive for their vendor management. 

 

Who is a vendor manager

 

The primary role of a vendor manager is to keep a close eye on the quality and effectiveness of services provided by the company’s vendors. Depending on the program’s complexity, a vendor manager assigned to a single or a group of contracts makes this even better to use. 

 

Vendor management challenges faced by the insurance industry

 

Data security: 

  • While getting insurance, we provide our personal information to the insurance. A piece of information passed on to a broker sends the same to an underwriter. Based on this information, these agents design and decide whether the customer is eligible for insurance or not. Customers’ personally identifiable information goes through many hands and is always at risk of being misused. Thus, the insurance industry is always the target of bad actors. Apart from holding large volumes of data, the industry also uses outdated technology compared to hackers. 

Communication: 

  • Effective communication is a critical requirement in the insurance industry as a company provides input to their vendors about services through a tiered series of meetings. These companies are always on the lookout for communication tools that allow all relevant shareholders to be on the same page regarding service expectations. 

Establishing expectations:

  • To achieve successful sourcing contracts, it is critical to establish the expected level of services. Regular reports on employee turnover, disaster recovery, service levels, customer satisfaction, and security are essential for effective service management. The industry demands regular discussions about performance results and issues.

Clarifying roles: 

  • One of the essential requirements for an effective vendor management system is to clearly define the roles and responsibilities of a vendor towards the company. The preferable way of doing so is through a Statement of Work as a Roles and Responsibility Matrix before the contract award.

Complex regulatory requirements:

  • Insurance companies fall under specific regulatory requirements as they are a part of the finance industry and aren’t regulated by the federal government. These regulations are administered by the state, meaning they must deal with 50+ individual state agencies daily. Insurance companies use attorneys licensed by the state. Thus, every insurance company is represented by an attorney for every state individually, making things more complicated. 

Risk management: 

  • The insurance industry is all about risk management. Insurance companies work on a risk-based model depending on the revenue generated by every insurer, broker, or reinsurer. The main two channels for any insurance company to earn revenue are charges and investments made on insurance premiums. Thus, the company is bound to assume the risk for the third party and diversify it across an extensive portfolio. 

Solutions for Vendor Management Challenges

Risk management:

Insurance companies work with financial agents on a contract basis. This induces the risk of losing customers’ personal details. Also, they are coined as high-risk businesses which are prone to cyber hacks. Having a highly secured network is not just a need but a necessity. Because of this, insurers are now transitioning fast into a digital-first business. Here, an effective vendor management system aids national insurance companies in maintaining the multiverse of vendors.

Establishing relationships with vendors:

The insurance industry demands a strong relationship with trusted and proven vendors. Vendor management uses the list of vendors to extract more important performance consistency while limiting points of failure in a cost-efficient manner.

Maintain data flow records:

Staffing and recruitment industry holds all necessary data of their talent cloud. When companies are working with their in-built talent pool, they might on-and-off need the candidate’s detail. When you have the access to the origin of the information, it becomes easy to monitor. Analyzing the origin of data and figuring out the best way and place to store it made it a tad bit easier with FlentisPRO VMS. Here the data flow diagrams turned out to be extremely helpful in performing this task.

Utilize a SaaS platform:

Insurers need to ensure cybersecurity for their vendors. This process becomes even more crucial while performing regular analysis and risk profiling tasks. Leverage technology to make this process more streamlined and efficient.

Data security

Vendor management software is a cloud-based software that enables companies, including those in the insurance industry, to manage various processes related to managing their vendors effectively. When it comes to this industry in particular, data security becomes a primary concern. The best VMS in the USA, such as FlentisPRO, offers password-protected document storage. You can integrate this software with existing in-house and outsourced applications, API calls, and a secure host network. We keep everything secured in the VMS cloud, like candidates’ resumes, certificates, licenses, NDAs, contracts, and more.

Communication

FlentisMeet is a built-in conferencing tool that allows you to communicate with your vendors directly. With features such as sharing the screen and recording meetings, the system enables communication delivered efficiently and effectively. This communication allows up to 100 participants to attend a video meeting simultaneously. You can attach recorded interviews to the candidate’s profile for easy access.


Clarifying roles

Setting expectations and clarifying roles are also a bothering challenge for insurance companies. VMS enables you to manage databases of timesheets and invoices. This software allows you to create scorecards while reviewing and monitoring candidates or suppliers. When it comes to this industry in particular, data security becomes a primary concern. The best VMS in the USA, such as FlentisPRO, offers password-protected document storage.

Leave a Reply

Your email address will not be published. Required fields are marked *

Trending

Exit mobile version