Most astute insurance agents will agree that a high percentage of their business activity involves the management of extremely confidential information. This is why electronic data storage is becoming more crucial.
Paper Filing Versus Electronic Data Storage
Since the early days of the insurance business, agents have depended on paperwork as the fundamental medium by which to manage insurance policy records. Although a few agencies still utilize this dated method, many shrewd agents are implementing electronic filing as their primary records management procedure. Paper to electronic document conversion involves the transferring of files from paper form to electronic images. The principal motive for electronic filing and storage is the enhanced security for confidential information contained in insurance policies.
Paper files are more accessible to a party without rightful access to the information listed on the insurance policy. The result of outsourcing electronic filing conversion and records management is that all files are encrypted; only authorized users may access the records, and the limited access virtually eliminates the threat of outsiders stealing any sensitive information.
With traditional paper filing, files are, at times, misplaced or misfiled due to human error. Electronic data storage allows an agent to easily save and retrieve the file directly from the workstation. Because the file is stored in electronic format, the likelihood of file misplacement is reduced. At times, there may still be a need for paper versions of such items as receipts, but the office will run more efficiently with a predominantly electronic filing format.
Policy Backup and Recovery
When many people think of a data backup and recovery plan, they generally imagine saving necessary files to a disc or flash drive so that they can retrieve them from another location or place them on a new computer. While this works well for family photographs or other personal files, an insurance agency requires a much more comprehensive backup and recovery plan for insurance policies.
Imagine a scenario in which there is a devastating storm that passes through and destroys an agent’s office. Perhaps there is an office fire. In all likelihood, all insurance documents residing in the office would be either severely damaged or completely destroyed. Even if files are stored electronically on multiple workstations, those contents would likely be damaged in the storm or fire as well. This is why many professionals in the insurance industry firmly believe that off-site data backup and recovery is indispensable. The agency’s policy records are safely stored and have the capacity to be easily retrieved, even in the event of a natural disaster or other type of calamity.
Another concern for agents is the threat of a technical failure within the agency’s network. Much of the policyholder records could potentially disappear. In many instances, the documents will vanish only temporarily; however, insurance agents prefer not to take that chance. The assurance that all insurance information is stored in a secure location is invaluable.