Insurance companies like any other companies are looking for more and more expansion options. They are outsourcing the functions like accounting and human resource management to third party accountants. The companies are able to focus on the core issued like product development and marketing by outsourcing the other functions.
The firms get many advantages by hiring the services of insurance accountant for their accounting function. They get various services like document management, accounts payable and accounts receivable services and many other premium services at a single window. They are also able to save costs as the firm need not employ a huge finance and accountancy department separately.
Another advantage of hiring an insurance accountant is, the professional accountancy firms have access to modern and latest technologies. They also employ highly qualified and experienced staff. The insurance company can benefit from both the latest software and experienced staff without actually investing in any of them.
However, there are some problems faced by insurance accountants in spite of the valuable services they offer to the insurance companies. The untrained accountants who do not have proper accreditations are a main problem for insurance firms. The development and availability of newer technologies also prefer to have their own in-house accounting team to care of all the work but hiring a professional insurance accountant serves a lot of other functions as they will also perform other functions like tax planning and business guidance.
The professional insurance accountants are prone to a number of claims owing to the nature of their business. Any small errors which may lead to financial loss of the insurance firm will have the accountant facing a claim. The insurance accountant employs a number of employees, who may have access to the client information. Misconduct of employees by selling this information to third party will also see huge claims against the accountant. The ever-changing technology also has brought about many risks like theft of data, if the clients confidential data is compromised, the accountant may face a claim from the company.
Opting for professional indemnity insurance will protect the insurance accountant from all these claims. They should calculate the required cover based on the size of their business and that of their client. A professional insurance will help the accountants to settle the claims and also cover the legal expenses.