The insurance industry leads the pack of industries whose processes are predominantly paper-based. With cost savings, faster turnaround times and increased customer satisfaction as major drivers, insurance providers, brokers, agents and third party intermediaries are looking for ways to automate and streamline the insurance supply chain.

Key automation considerations include the ability to gather and exchange data in a secure, reliable and auditable manner - effectively bringing supply chain participants together in an efficiently managed, cohesive community.

"Define the processes and you define the company. Streamline those processes and you make the company more profitable. Today's organizational leaders are looking for solutions to streamline their current processes and make them more profitable."  Insurance Analyst Jeffrey Marks

The first business processes to come under scrutiny by today's organizational leaders are those that are heavily paper-based, labor intensive and influence customer relations. In the insurance industry, that defines the majority of all applications, claims, change orders, invoices and policy decks.

Gartner Group estimates that the amount of time wasted by the average worker on document-related, non-value-added tasks is currently 30% of each day. This figure is estimated to increase to nearly 40% of each worker's day by the year 2003. When combined with the industry standards for the actual costs associated with paper-based processes, it becomes evident how much time and money can be saved by automating with a complete solution.

More Costs Associated with Paper

• The average document is copied, either physically or electronically, 9 to 11 times at a cost of about $18. 
• Documents cost approximately $20 to file. 
• Retrieving a misfiled document costs approximately $120. 
• Soft costs, such as onsite or offsite storage, physical plant, postal and distribution costs, vary according to the size of an organization, but are significant to the bottom-line.

The above statistics can be used to translate an actual ROI for a theoretical organization. For every 1,000 users, the following cost savings impact can be determined. The formula does not take into account soft costs, such as misfiled, lost or inaccurate files.

Assuming an average compensation of $55,000 per year, per user, the amount of time wasted on paper-based processes can be conservatively estimated at approximately $11,000 per year, per user. On an aggregate basis, $11 million per year is wasted (a conservative 20% of time wasted multiplied by the average compensation and number of users). As the volume and velocity of document based information increases, the problem becomes more compounded.

Expected and realized benefits include:

• Lowered document production costs. 
• Elimination of data duplication and errors. 
• Increased data integrity. 
• Increased access by all supply chain participants.

Cost Savings with Formatta

The potential cost savings, combined with efficiency of process and workflow, provides ample argument to implement electronic forms and suggest ROI can be achieved in weeks not months. Additionally, the added value, efficiency, security, decreased turn-around times and competitive differentiation afforded make a Formatta implementation a sound business decision. Contact us today at (888) 993-6767 or sales@formatta.com.