How to Avoid the Challenges Associated with Policy Misclassification

Data errors in client policies can wreak havoc on insurance agency reporting. Misclassifying a policy's business type (commercial vs personal) leads to inaccurate revenue reports, mispriced policies, missed opportunities, incorrect commission payments, and even regulatory fines.

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Manual corrections are a time-sink and often introduce more errors. Existing solutions usually require Account Managers (AMs) to export data from the AMS, fix any misclassification errors, and re-enter the data manually.  Agencies need a solution that automatically corrects discrepancies at the source, guaranteeing their AMS data is error-free. This will boost both report accuracy and operational efficiency, allowing agencies to focus on growth and client satisfaction without being bogged down by data issues.

[Related Topic: A Report is Only as Good as The Data Used to Compile It]

The Challenge Related to Policy Misclassification

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One of the challenges insurance agencies face is ensuring the accuracy of data used in revenue reports. A common error is misclassifying the line of business for each policy. This often happens when an Account Manager (AM) mistakenly records a policy as personal instead of commercial, or vice versa. A slip-up in the AMS Line of Business field is tagging an automotive policy as AutoP (Auto Personal) instead of AutoB (Auto Business). This seemingly small mistake can lead to significant consequences, in that revenue is misreported, and commissions and targets are incorrectly calculated.

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Fixing these errors usually requires the AM to open each policy, review client details in the AMS, and correct the line of business as needed. While manageable for a few policies, this issue can occur frequently, forcing AMs to screen numerous policies manually. This tedious process becomes an administrative nightmare that bogs down efficiency and productivity.

The Impact of Incorrect Policy Data on an Agency

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Incorrect data can have a major negative impact:

• Revenue reports may inaccurately reflect commercial line values at a customer level.
• When reporting at a policy detail level, some policies may fail to appear altogether.
• Inaccuracies in reports can complicate cost and revenue management.
• Misclassified policies risk overlooking profitable opportunities or neglecting underperforming areas that require attention.
• Correcting errors consumes valuable time and resources, diverting attention from strategic activities. ‍

‍‍How DataFix Corrects Inaccurate Policy Data

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DataFix by Synatic takes the hassle out of daily manual error-checking tasks for agents. Leveraging Artificial Intelligence (AI) and other cutting-edge technologies, DataFix zeroes in on policies with discrepancies and corrects line of business errors by exception rather than quantity.  

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Instead of AMs reviewing the Line of Business field in 10,000 policies to identify errors, DataFix allows AMs to easily review the line of business errors in specific policies that contain errors. It then automatically suggests and makes the appropriate fixes, flagging any data points that can't be fixed automatically or that need further review. This means AMs can focus on exceptions versus hundreds or thousands of policies, saving agencies time and money. In addition to streamlining the way AMs review policies, DataFix continuously updates and corrects policies directly within the agency's AMS, ensuring that the data remains error-free at all times.

[Related Topic: Using AI to Fix Customer Data Quality in Your AMS]

Benefits of Using DataFix

• With DataFix, accurate revenue reports can be relied upon to offer clear insights into financial performance, enabling management to make informed decisions about budgeting, investments, and resource allocation.
• With accurate revenue data, agencies can manage cash flow more effectively, create realistic financial forecasts, and set achievable goals.
• When revenue reports are based on clean data, agencies can identify profitable and unprofitable segments. This allows them to focus on high-margin products and services, optimizing their profitability.

Cleaning data in an AMS often takes a long time and is costly, whether it is done in-house or by third parties. DataFix ensures that the data in your AMS is up-to-date and correct, eliminating the time and expense of embarking on data-cleaning projects. More importantly, it gives agency managers and staff 100% trust in their AMS and the reports it produces. To learn how DataFix can give you accurate client data, contact Synatic today.