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Insurance companies generate revenue by selling a variety of insurance policies and annuities to consumers and business clients. Employees who underwrite policies and process claims work in the insurance back office. The majority of an insurance company's employees are back office workers.
Different insurance products are developed in the back office by actuaries who study statistical data related to mortality rates and risk factors and who use this data to price insurance products so that the company can reliably expect to generate profits without facing undue levels of risk. Product developers also decide how much risk the company can afford to accept in relation to different types of insurees, such as homeowners, automobile owners, or people seeking life insurance coverage. Executives in the insurance back office oversee the product development and prepare reports for shareholders that detail the company's plans and earnings projections.
Sales agents submit insurance applications to underwriters who work in the insurance back office. The underwriters review the applicant's personal information and determine whether the applicant meets the insurance company's eligibility guidelines. Underwriters can opt to raise premium levels for people that are viewed as high-risk insurees, and the underwriter can also reject applications if people expose the firm to high levels of risk.
Policyholders typically make monthly or annual premium payments, and these payments are processed by clerks in the insurance back office. Clerks can terminate policies if insurees fail to pay premiums on time. Insurance clerks also liaise with third parties, such as automobile repair shops, hospitals, and mortgage companies, in order to process payments.
Claims are processed in the back office by clerks who must determine whether the company has a responsibility to settle the claim under the terms of the insuree’s contract. Clerks must disburse checks to claimants and lien holders that have claims on insured property, such as vehicles or real estate. A claims clerk also has to give consent before a contractor can carry out work on an insured piece of property. In some instances, clerks contact vendors to find the lowest price for repair work on vehicles or homes so as to minimize the insurance firm's payout.
Some accidents involving insured property result in legal disputes. Consequently, most insurance firms employ lawyers who work in the back office and negotiate with lawyers representing other parties in order to keep costs low by settling disputes outside court. Staff lawyers also provide claims clerks with legal advice pertaining to the settling of claims. Overall, the back office lawyers, clerks, and underwriters conduct most of the day-to-day operations of the insurance firm.