How can the Insurance Industry Benefit from BPO services during the Corona Crisis?
Every insurance business around the world constitutes multiple internal and external processes for which it needs a skilled workforce and resources. Some of the businesses choose to keep things in-house and bear the associated expenses while others seek external help to manage some of its processes, along looking forward to saving costs and time.
This is where Business Process Outsourcing (BPO) comes in. It has been a while since insurers have benefited from Insurance BPO services but due to the corona crisis, this has become more of a necessity than an option. So, let’s discuss in detail as to why exactly insurers need BPO services, especially during this challenging time.
COVID-19’s Effect on the Insurance Businesses
Insurers are facing multiple challenges due to coronavirus, both in terms of operations and growth, as discussed below:
- Negative Impact on Investment Portfolios
To generate returns, the insurance companies rely on their investment portfolios to a great extent. However, due to the worldwide economic crisis, these portfolios have been affected in a negative way. Apart from this, with the rise in the drop in interest rates, reduced interest income revenue is expected.
- Pending Payments
Despite the fact that liquidity has been impacted severely, insurers are looked upon to pay out claims. Insurance regulators are requesting insurers to accept delayed payments with a zero penalty in this pandemic, affecting cash flow eventually.
- Lowered Premium Value
Due to coronavirus lockdown, most of the businesses are partially or completely closed. This has led to a decrease in employees’ compensation, including the payroll-based premiums and buying of insurance-related products like cars, houses, and more.
- Rising Coverage Disputes
Most of the insurance policies do not cover pandemic, and this is becoming the cause of dispute since more and more people are falling ill due to coronavirus. Also, a few states are forcing its inclusion in health coverage but insurers are also standing tall against such additional expenses, making things even more complex.
- Dealing with a Plethora of Queries
Everyone who owns coverage, be it for health, travel, business interruption, etc., is having a lot of queries in his mind during this pandemic time. Dealing with such a large number of queries of customers, satisfying them, and maintaining brand loyalty is becoming difficult for insurers.
- Competing with Digital Competitors
Insurers that follow a traditional manual approach towards managing their processes are experiencing tough competition from their peers who have invested heavily in digital processes. With less time and more customers to deal with, digitalization has become a necessity for such insurers.
- Workforce Shortage
Countries like the U.S.A where a majority of people are falling sick due to coronavirus; there is a staff shortage both internally and at the work-from-home end. Insurers practicing in these countries need to seek external help from other countries.
- Dealing with Distribution Channels
Insures are facing difficulties in trying to communicate with their intermediaries and brokers, especially the ones who provide administrative services and lack IT infrastructure. This is making query calls of customers unattended since they are not being forwarded to the Customer Service Representatives working from home.
- Mitigating Fraud Claims
Fraudsters are taking advantage of the corona crisis and filing for fraudulent claims concerning travel, health, and other coverage. It is not as if insurers are not capable of dealing with such claims, but a lack of staff and work overload is making insurers less capable of handling the same.
- Lack of Resources for Remote Working
Although remote working has helped insurers make their employees handle most of their processes from home itself, not every employee has the essential resources available at home like a laptop, a fast internet connection, and more. Investing in the same for the employees during a lower revenue generation time is not a viable option for insurers, and they are looking for other options.
How can BPO Help Overcome such Challenges for Insurers?
BPO services can help the insurance companies deal with multiple challenges in the COVID-19 crisis through the following:
1. Back-Office Support
BPO providers can help insurers with managing their back-office processes comprising:
- New Business Servicing
- Policy Management
- Commissions Management
- Insurance Reporting
- Data Processing & Mining
- Claims Administration
- Insurance Accounting
- Customer Support
2. Experienced & Skilled Workforce
With BPO, you get a fully-fledged team to work for you that comprises highly skilled and industry experienced people. This way, insurers can not only meet staff shortage during the crisis but also take advantage of their domain expertise in increasing customer retention, exploring new sales channel, cross/up-selling, and more.
With outsourcing, insurers can save a lot on the infrastructure, technology, and set-up expenses for employees at home.
4. Technical Edge
BPO providers have the best IT infrastructure and technical team in place and can meet the digital needs of insurers during such challenging times with ease.
When back-office processes get managed at the hands of outsourcing experts, insurers can save a considerable amount of time and utilize the same for focusing on core competencies.
6. Research and Analytics
When you outsource your research and analytics process, insurers get expert guidance for optimizing their pricing models and calculating accurate premiums in the corona crisis to target customers based on risk profiles, groups, and demographics.
7. Enhanced Data/Cybersecurity
With remote working, data loss is at risk for sure. However, with outsourcing, this risk is reduced at large since they have the best data safety protocols and cybersecurity tools in place.
8. Customer Support
Most of the BPO models are based on customer support, and these companies are an expert in providing the best customer support. During this challenging time, insurers are finding it difficult to retain clients since they are unable to respond to their queries on time.
Insurers need to understand that their customers need more than just professional support concerning their claims’ queries. They also need emotional support during the corona crisis, and this is only possible when the expert outsourcing communication team is available 24/7 to address their concerns.
Unlike other businesses of the world, the insurance sector is more at the receiving end during the corona crisis. Insurers are not only struggling to ensure smooth business operations with fewer workforces but also dealing with increasing client queries and claim disputes.
Outsourcing has always been one of the best supports to insurers and during this time, it can support them greatly in the various ways as mentioned above and help them emerge out as a winner in the corona battle.
Are you also looking for a renowned outsourcing provider who can support you during such challenging times? Meet Insurance Support World! It has been providing quality insurance back-office services to insurers worldwide for 12 years. Start your free trial by getting in touch with our outsourcing experts today itself!