How CLM helps insurance companies reduce administrative waste in 2024

As the insurance industry continues to evolve, forward-looking firms are embracing technology solutions like contract lifecycle management (CLM) software to stay ahead of the curve. By automating manual processes, CLM reduces insurers’ administrative waste, mitigates compliance risks, and drives operational excellence. Advanced CLM tools—specifically those offered by Conga in partnership with Accenture—help keep contracting simple and enhance insurers' efficiency across the contract management lifecycle. 

How CLM automation addresses the problem of administrative waste in insurance 

For insurers, managing all the steps in the contract process across internal departments is already difficult. The complexity of managing contracts  increases exponentially when you have to deal with multiple office locations, time zones, or languages.  

When contracts are managed manually, human error and bottlenecks inevitably find their way into the contract lifecycle. Automating contract management using CLM solutions helps insurance companies improve control and visibility, significantly shortening contract creation time.  

When contracts are completed faster, you can collect on them sooner. If they’re drafted accurately, you have fewer revisions to slow down the process and likely fewer disputes later on. General counsel and C-level executives can rest assured that the contract management process is working as it should. Ultimately, thanks to CLM, everyone involved in the contracting process can spend more time on higher-value work.  

According to the Accenture Global Insurance Customer Study, insurance firms are keen to renovate their digital core. Many insurers still rely on outdated legacy systems that make it challenging to provide a seamless customer experience and efficiently leverage customer data. Additionally, many insurers still manage their operations within silos, where data, processes, technologies, and people are fragmented and not integrated, causing operational inefficiencies. 

Changing customer expectations 
Customers increasingly desire personalized products and services, expecting tailored coverage options based on their specific lifestyle and preferences. 

Times of uncertainty 
Concerns over economic slowdown caused by geopolitical instability, energy shortages, and a spike in inflation. 

Accenture's reach and impact 
90% of the insurance companies in the Fortune Global 500 are served by Accenture. 

• A strong ecosystem across 150+ insurance partners. 

• Accenture works with 9 of the top 10 P&C insurers and with 23 of the top 25 life insurers. 

How CLM technology streamlines contract management across the contract lifecycle 

Let’s take a closer look at how CLM solutions support end-to-end contract management—from contract requests and drafting to renewals, amendments, and everything in between: 

1. Request 
The first step in the contract process is triggered when someone requests a new contract. In some insurance companies, the request process may be informal and disorganized. Without centrally located or easily accessible templates, outdated contracts will likely be utilized as ad-hoc templates, exposing the insurer to financial and compliance risks.  

An unstructured contract request process is also slow and inefficient. The details needed to create the contract are usually shared verbally or by email.  

A CLM solution automates the contract request process with a guided self-service tool. Individual business groups can request the contract types they need, and the contract creators—usually in the legal department—can respond according to measurable service level agreements they have with their business teams.  

2. Drafting  
Lawyers have a specialized skill set, and their time is typically limited. If legal teams need to get involved in creating every standard contract, your contract management process and sales cycles become riddled with slow and costly bottlenecks.  

So it’s ideal to use templates for everyday contracts and common clauses wherever possible. That way, high-value legal resources can focus on exceptions, such as complex or one-off strategic agreements that require significant negotiation.  

CLM solutions automate and accelerate the contract drafting process. They allow in-house counsel to approve centralized templates in advance, which can be reused with minimal additional intervention on their part.  

3. Negotiate  
Contract negotiation involves more than both parties agreeing on a price. Other critical elements like service levels, liabilities, options for renewal or termination, and intellectual property need to be included in the contract and are potentially open to negotiation.  

During the negotiation phase, it’s vital to use precise and up-to-date terms and keep track of any changes or redlines that may be made. While it’s easy to track changes using Microsoft Word's built-in capabilities, this tool isn’t designed for documents that pass through many hands. 

With CLM software, changes can be tracked in real time with visibility across teams, maintaining accuracy and consistency throughout negotiations. Since many contract managers and lawyers are accustomed to using Microsoft Word or other word-processing software to create contracts, it’s important that your CLM system allows users to perform their negotiation tasks directly inside the tool they’re most familiar with.  

4.  Approval  
Part of the challenge of approvals is finding the right balance between too much oversight and not enough. It’s critical that your contract management system can facilitate the approvals and controls needed to protect the company’s interests. At the same time, your solution must have the flexibility to automatically navigate the quickest route to executing the agreement. 

With an advanced CLM solution, all stakeholders involved in the approval process can review and approve contracts electronically and even on mobile devices, dramatically speeding up contract approval cycles.  

5. Execution 
Execution is the stage where the contract is signed and goes into effect. An eSignature solution can reduce execution time from days to minutes while maintaining a complete audit trail to track the signing process. After signature, the contract terms become a set of instructions for the different parties involved.  

But what happens then? Too often, a contract’s final resting place is in a filing cabinet somewhere in the legal department or on a hard drive. If you manage your contracts that way, you may be missing many of the revenue growth opportunities contract management offers. Many contract management also leaves you open to risk in case of a dispute or the need for a contract modification.  

This is where having a seamless process for sharing contract details among teams is critical. A centralized CLM software system stores contracts in a secure repository and ensures they’re always easy to access.  

6. Obligations 
The obligations stage involves ensuring all parties deliver on their commitments and responsibilities—delivering goods and services, meeting deadlines, issuing reports, making timely payments, and more.  

The best CLM software integrates seamlessly with insurance companies’ front- and back-end systems, such as customer relationship management (CRM) and enterprise resource planning (ERP). This ensures contracts are accessible to all involved stakeholders, such as sales, customer success, fulfillment, and operations teams. Any changes made to contracts are automatically delivered to the right team for action.  

With obligation management closely integrated with both your CRM and ERP systems, you won’t miss a deadline or lose track of a payment.  

7. Compliance  
The compliance element of contract management may include providing regular reports to internal and external parties about contracts and your performance against your obligations. You also might need to locate specific contracts to comply with insurance industry requirements, government regulations, audits, or responses to lawsuits.  

Therefore, your CLM contract repository must have detailed search and reporting capabilities. You want to be able to search for business terms, contract clauses, performance to obligation, and free text. Without a digital repository, searching for information in your contracts can be costly, time-consuming, and frustrating.  

The quicker you can access the information inside your contracts and take necessary action, the more time and money you’ll save. You’ll also reduce overall risk and spend less time on non-core business activities.  

8. Amendment/renewal  
Before a contract expires, you’ll want to send a new version to the customer for renewal. This will trigger a new round of drafting, negotiation, and approvals.  

If you’re managing contracts without CLM software, it’s easy to lose track of renewals and let a contract expire accidentally. You might end up rushing to get a new contract signed at the last minute before the current one expires. 

CLM software provides automatic alerts, reporting, and search abilities, enabling you to stay on top of renewals and handle amendments. 

How CLM improves interdepartmental communication and collaboration 

With so many moving parts and dependencies in modern insurance contracts, it’s critical that nothing gets lost in the shuffle.  

Different teams may handle contracts in a variety of ways. Often these processes are siloed, leading to oversights, poor planning, and missed deadlines. When teams rely on manual processes, it leaves more room for error and added risk that can cost time and money.  

CLM enables collaboration in the contracting process, streamlining efforts across departments and the teams that run them. Automation provides clear insights into contract status and stakeholder activity, ensuring the contracting process keeps moving forward.