How digitized reporting can prevent nightmares for insurers and customers
Automated SR22 reporting can prevent the many issues auto insurers face when certificates aren’t filed according to state regulations.
Drivers with a history of serious violations or letting their insurance lapse can become an administrative burden for insurers. These drivers may need certificates of financial responsibility filed on their behalf with state motor vehicle authorities. These certificates, often called SR22s, verify that these drivers have the required auto liability coverage.
That reporting burden for insurers, though, can quickly become a significant problem for all involved if the SR22s aren’t filed in compliance with state regulations.
A driver could be erroneously flagged for lacking coverage because the insurer’s SR22 reporting workflow fell short. The result could be an irate driver and a lost customer for the insurer.
If that scenario is repeated, insurers’ profitability could suffer, as they spend time and resources correcting filings, repairing damage to their reputations, and rebuilding their portfolios.
Basic but essential
SR22 filing lies within a broader range of reporting responsibilities that can be a significant draw on an insurer’s resources. These functions, which can have policyholder implications similar to SR22s if they miss the mark, are complicated by varying state requirements and reporting mechanisms. From USPS mail to email and online portals, the processes are consistently inconsistent, and it may be expensive and time-consuming for an insurer to manage it all in-house.
Three keys to digitization
How can insurers get a grip on state reporting and get on with the work that adds value to their business? Here are three principles that may help:
Bring it online. The opportunity for electronic SR22 reporting is growing. It can increase speed, efficiency, and reliability when used in multiple states, providing a low-touch process that eases the strain on insurers’ resources and spares policyholders from hassles with the state jurisdictions or DMV. While a few states offer their own electronic systems for reporting, there is technology you can use to automate reporting across your book of business.
Blend workflows. You could separate SR22s from your other state reporting requirements. But is that the most efficient workflow? Combining SR22 reporting with meeting other state requirements can help ensure that all the processes work seamlessly together. Adjacent functions with similar data needs may include auto liability insurance reporting (ALIR) and lienholder notifications, which can also be labor intensive with little to any competitive advantages for the insurer.
Be adaptable. Even a successful process won’t necessarily work everywhere. Flexibility is important to meet the requirements of processes that vary state by state, ranging from paper-based to online workflows. Tools that are agile enough to distribute policy changes in any form, from hard copy to digital, and interact smoothly with external systems can create increased efficiency in a digital ecosystem.
Tackling the task
These capabilities may be difficult and costly to build from the ground up, putting significant demands on the funding, intellectual capital, and resources of an insurer’s IT department just to stay compliant. Using an experienced vendor’s proven technology and existing data sets may help insurers avoid the slog of developing their own solutions.
When considering a third-party solution, you may want to look for these features:
- an ecosystem of workflow tools for a range of tasks
- a single system that extracts, formats, and transmits data according to each state’s specifications
- Once and done implementation
The assurance that auto insurers need
Automated SR22 reporting won’t attract new customers. But it will help the many insurers that have been accelerating efforts to digitize their business from end to end, especially during the COVID-19 pandemic. Extending that transformation to state reporting could deliver an easy win that saves money — and reduces stress as we adapt to the new normal.
Stacy Howard (showard@verisk.com) is product manager of CV Services at Verisk, where she manages a suite of services supporting compliance reporting between carriers, the department of motor vehicles, and lenders. She has 20+ years of experience in the property & casualty insurance industry, with expertise in data compliance and supporting insurance carriers in a business process outsourcing environment. The opinions expressed here are the author’s own.
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