Insurance is one of the largest industrial segments in the world. In 2013, the total revenue of insurance companies in the US exceeded 1 trillion dollars. As of 2013, there were over 6000 different insurance companies that employ over 2.5 million workers. There are two basic types of insurance categories, life/health and property/casualty.
A person typically has a health insurance policy, a home owner’s policy, an automotive policy for every car they owned, and often some sort of life insurance. The head of a house hold may have as many as one dozen different insurance policies written in his or her name. Considering that the average person owns over a dozen cars in his or her life time, lives in at least 5 different homes or apartments all of which require insurance a person may easily have had over 30 different insurance policies.
This does not include other insurance policies that some people get such as dental insurance, pet insurance, business liability insurance, travel insurance and professional insurance. Many babies have insurance policies taken out on them at birth. With over 300 million people in the US now, one can see that there are a huge number of insurance policies in existence or archived.
Any insurance policy that was issued in the last decade, in all likelihood is in digital format. But the insurance industry is nearly as old as ancient Egypt. Some of today’s modern insurance companies have been around for quite some time. Prudential insurance, for example was founded in 1825. State Farm Insurance is a relative newcomer to the industry having been founded in 1922. Even if we assume that most insurance information collected in the last 20 years is stored in digital format, there is still a monumental amount of non-digital records that are either still active or archived. So while new policies are surely in digital format, the insurance industry in general has a challenge in the storage and management of old records, most of which are probably paper, but some may have been put in microfilm or microfiche.
While there is no requirement for the insurance consumer to keep records, insurance companies are generally required to keep a policy on file for at least 5 years after the policy expires, changed or terminated. We say in general because the legal requirements will vary by type. There is no statute of limitations on fraud claims filed by the IRS, so in some cases insurance companies are keeping records indefinitely. Regardless of requirements, many insurance companies are choosing to permanently archive insurance records. Many are now choosing to scan old records and store in digital format.
Storing and managing physical records whether it is paper, microfilm or microfiche can be difficult and risky enough over time, but when look at the number of acquisitions and mergers that occur in the insurance industry, the record keeping becomes monumental.
Scanning and digitizing is actually fairly inexpensive when done by experts using state of the art technology. When considering the risk and cost of storing paper records, the return on investment for digitizing is very good.
