As businesses continue to streamline operations and look for cost savings, the decision to outsource specific processes or retain them in-house remains at the forefront of many discussions. At first blush, maintaining control and keeping functions such as a print and mail operation in-house can seem to be the most budget-friendly choice. In reality, even the most efficient in-house operation comes at a cost. Business leaders must consider all pieces of the puzzle to determine whether outsourcing customer communications or handling it all in-house makes the most sense in the insurance industry.
Let’s review a few points below.
Cost Control
The equipment needed to produce high-quality outbound communications for insurance companies is expensive and depreciates quickly. High-volume printing of letters, statements, claims documents, checks, explanation of benefits, welcome kits, enrollment packets, marketing communications, insurance cards and more puts a severe strain on equipment over time.
Equipment configurations can cost between $50,000 and $3-5M to support the volume, frequency, and type of documents typical in the insurance industry. The same guidance holds for mailing equipment, which can set you back roughly $5,000 for a high-quality desktop folder/inserter to $1M or more for a fully automated intelligent machine. Production tracking software, equipment maintenance, space utilization and trained operators come at additional costs.
Ultimately, outsourcing print is a cost reduction strategy that eliminates significant internal investment in equipment, materials, and personnel. A seasoned print and mail partner in the insurance sector will bring experience in particular service areas like Property and Casualty, Healthcare, Group Benefits and more. They will also have the knowledge and flexibility to manage any production peaks and fluctuating print volumes over time, alleviating considerations of supply, personnel, and scheduling from an in-house operation. A skilled print and mail vendor can implement scalable solutions for low volumes, high volumes and everywhere in between.
Facility Management and Space Requirements
Facility management, space utilization, and never-before-experienced logistical challenges are also hot topics. Many insurance companies plan to engage a remote workforce for the foreseeable future, which reduces the need for physical workspaces.
Conversely, organizations with on-site teams must now accommodate social distancing requirements and, in turn, require more space than before. When utilizing a vendor partner for outbound customer-facing communications, precious space is no longer monopolized by the reams of paper, materials, equipment, and machinery necessary for an in-house print and mail operation. Transitioning an in-house function to an outsourcing partner allows operational space to be eliminated, reduced, or repurposed for other business-critical processes and personnel.
Personnel Efficiency and Expense
Beyond the obvious cost of materials and equipment, it’s easy to overlook intangible costs such as personnel under-utilization. Unless operators are busy all day, they will likely have other miscellaneous tasks, and thus, there are hidden costs associated with personnel efficiency — or inefficiency. Management, prioritization of personnel resources and loss of productivity due to “getting up to speed” create additional hidden costs. Not to mention training, as eventually back-up staff are needed in the event of sickness, vacations, or weather-related personnel outages.
Weighing the pros and cons of managing a print and mail operation in-house or outsourcing to a vendor partner can become more manageable with an outside perspective. As you take a deep dive into your existing processes, it will be beneficial to connect with a vendor well-versed in the insurance industry’s print and mail requirements. Docufree’s team has decades of experience successfully delivering print and mail projects for insurance companies. We currently handle vital outbound communications for some of the largest insurers and financial institutions in the US.
If you are considering outsourcing insurance-related print and mail projects, revisiting past decisions, or thinking about bringing production in-house, you’ll likely find our downloadable eBook useful. It contains 7 additional items to keep in mind when determining the best strategy for your organization. Click here to read our eBook, “Considering Outsourcing Your Printed Communications?” now.
