The insurance industry is constantly changing to accommodatecomplicated new regulations and a changing competitive landscape.Yet while there are more technological innovations available thanever before to minimize risk and maximize profitability, hazardousmanual processes still permeate the industry's business practices.      

Spreadsheets, for example, are widely misused for relativelysophisticated activities. Most companies underestimate theirreliance on using these tools to run their insurance programs.

Even with their ease of development and deployment, managingvast amounts of data without error or consequence is very difficultwith spreadsheets because they are a modeling and reporting tool,not a business system.

Ten years ago, automation technology was an option for theinsurance industry. Today, it is a necessity for any company thatwants to remain competitive. Through automated processes, firmsmitigate the risk of errors, better comply with regulatory mandatesand improve efficiency.

Lack of version control
Companies thatrely on manual processes may find they have multiple versions ofthe same document in use, which increases the risk of errors. Usinga spreadsheet for quoting, for example, can be dangerous ifa user pulls down a spreadsheet from the network with oldor incorrect rates.

A user should know that he is automatically using the latestrates and correct rating algorithm, and that all data is up to dateand current. There should not be a question of whether aspreadsheet is the "official" version.

Automated technology allows multiple users to access all datafrom one consistent version in real time to make decisions.

Lack of audit trails
Spreadsheets enablebusinesses to visualize and organize data in a way that people whohave no technical background can easily use. However, spreadsheetsshould never be used as a system of record. Even one small errorcan produce the wrong result and affect an entire account. A usermay disagree with formulated values on a spreadsheet, set up theirown controls and link the results from the first document to thesecond with no oversight or testing for accuracy.

Changes to calculations involving premiums need to be verifiedfor accuracy and should require user authentication, somethingmanual processes cannot do.

Companies need applications that leave an automated audit trailof changes made, who made them and why as well as the receipt ofproactive alerts about changes to algorithms and important data. Ontop of that, these audit trails should be easily reportable.

Lack of consistent data management
Aspreadsheet has uncontrolled data formatting and organization. As aresult, it is very hard to ensure that the same data standard isenforced throughout the company.

Taking an inventory of all critical spreadsheets acrosscorporate data sources, including file shares, employee desktopsand document repositories ensures the data elements are beingconsistently formatted.

Inconsistent data formats can cause issues during datawarehousing or big data analytics. Using an automated softwaresystem enables controls to be enforced on the data elements andallows easier use of business intelligence and reporting toolsacross the enterprise. Information can be organized in onewarehouse and recorded in a central system and accessed inreal-time.

Lack of scalability 
Insurance agencies that experience rapid growth produce more data,and as a result, must hire additional employees to manually processthis data, which diminishes profit and net income.

In some cases, companies cannot handle the increase in data andhave to turn away business. Complex processes such as specialtylines ratings are difficult to perform correctly when handledmanually. To thrive, agencies and carriers need automated processesand technology that enable them to grow without having to addadditional staff. 

Insurance agencies and companies can no longer effectivelycompete using manual processes. Succeeding in today's uncertainbusiness environment requires organizations to embrace newtechnologies that enhance growth, improve efficiency and reducerisk to the institution and its stakeholders.