How Insurance Outsourcing Services would be a Prudent Business Move?
Blog: Insurance Support World - Blog
Over the last few years, insurance companies have leveraged business process outsourcing models, taking several advantages. Many of them have optimized operations, enhanced service offerings, and increased service delivery speed, all leading to higher customer satisfaction.
Insurers are increasingly turning to insurance outsourcing companies for efficient business process management. In fact, five years down the line, outsourcing is likely to be more popular. According to Fortunly, the BPO market size is expected to grow at a CAGR of 8%, reaching $405.6 billion by 2027.
Insurers looking for higher productivity, profitability, and growth are obtaining outsourcing services. However, the route to a successful implementation of insurance BPO is not easy; let’s discuss some of the most common challenges insurers face regarding outsourcing.
The Unnecessary Fear of Layoff in Employees
As you plan to tap into insurance back-office outsourcing and discuss it with your staff, they might worry or even develop a fear of losing their job. However, this situation can be handled quite easily if you assure them that you are contracting outsourcing services for their support and not for their replacement. Inform them that the outsourced partnership is to free up their time which they can use for other important tasks that actually generate value for the business.
Transitioning Issues
It is quite challenging to examine your internal processes to detect issues such as efficiency shortage, hurdles in workflow management, etc. The best way to execute such audits is to take help from an insurance BPO service provider as their team can do this assessment, based on which they tell you their scope of service for your firm. In fact, reliable insurance BPO companies ensure effective collaboration with your in-house team for smooth and efficient transition, all while keeping your unique needs into consideration.
Outsourcing – a Costly Affair
You might have avoided outsourcing before due to finding these services costly. However, this is not the end, as several firms offer high-quality services at affordable costs. Many of them even offer variable pricing models, allowing you to pay on an hourly or project basis. That way, you only pay for the specific services you obtain – if you only need support with policy checking, you need not pay a sum equivalent to the cost for the entire policy management process. Many firms are providing fast and reliable services at reasonable costs. All you need to do is to find them and evaluate their capabilities well in advance.
Concerns about Service Quality Degradation
It is quite difficult to trust an external firm for the execution of your insurance business operations as you don’t know if they would be able to keep up with the quality you have been maintaining for years. In order to make sure everything remains the same or improves, you need to make things clear between you and your outsourcing partner. Ask as many questions as you can about their operating model, quality audit protocol, and service delivery procedures. Upon receiving appropriate answers, you may choose an insurance BPO partner who meets your requirements regarding service quality assurance.
You might also face these or other similar issues but as discussed above, you can easily meet those challenges if you prepare a solid plan for your outsourcing needs. Getting further, let’s take a quick look at some of the tasks you can outsource with confidence.
Common Tasks Insurance Companies Typically Outsource
- Bookkeeping and accounting
- Payroll management
- Broking services
- Policy administration
- Claims processing
- Underwriting
While the scope of insurance outsourcing is not limited to the above-mentioned, you can outsource as many back-office processes as you want, provided you find a trusted and responsible service provider. As a result, you would be able to realize not only higher efficiency and productivity but also a series of benefits which are described below.
Top Benefits of Outsourcing Insurance Services
Cost Savings
“Outsourcing is expensive” is a myth as in contrast, it helps you reduce your overhead costs. First, outsourcing allows you to pay per hour or project, directly saving you a considerable amount of money. Second, you need not invest in infrastructure and equipment and pay a fixed monthly salary, insurance cover, perks, and benefits.
All these factors help you save more. In addition to that, if you hire a few employees in-house, you know how fast onboarding and training costs can rise. On the other hand, insurance outsourcing firms usually have skilled and professionally trained specialists, eliminating training costs from your side.
Operating flexibility & Transparency
As you outsource, you would realize that the outsourced team works as an extension of your in-house team. Moreover, these firms generally provide round-the-clock services, meaning they can work on your projects even when your business hours are off.
Apart from that, you would experience greater transparency in processes as they can help you build an optimization-focused operating model keeping all stakeholders involved. The best thing about outsourcing services is that you can scale up or down as per your changing requirements. For example, if you experience a sudden increase in the flow of incoming customers, you can access more staff from your outsourcing partner and similarly scale down as required.
Best Technology Utilization
Joining hands with an experienced outsourcing firm allows you to leverage your technology investment. Not only that, a tech-enabled outsourcing partner can even help you determine your technology needs, helping you select the software applications that best suit your needs.
There would be no use of technology if you do not have the staff who can use it. In such a situation, outsourcing comes as a viable option, enabling you to access tech-savvy insurance specialists who can help you make the best use of your tech investment.
Unmatched Talent
Talent acquisition is one of the biggest concerns for insurers these days.
According to a Deloitte study, “attracting the right talent may be the biggest challenge insurers face in 2022”
It is not easy to find and hire skilled and competent employees and then adding to that are employee retention challenges. Insurance BPO helps you keep all such concerns away and tap into a large pool of talent. Insurance outsourcing firms typically have a large workforce of qualified and experienced insurance specialists who would not let you experience a shortage of resources at any point in time.
For instance, if someone from their team leaves the job, it is their responsibility to hire their replacement, keeping you away from all recruitment challenges.
Superior Customer Experience
In the end, everything comes down to how happy your customers are with your products and services. With the help of an outsourced team, you can ensure your operations are up to the mark and speedily executed. As a result, you can maintain an optimal turnaround time for policies.
For example, if your firm used to take seven days to issue a policy from the scratch, you can now do it in a couple of days with an additional staff working on your back-office tasks round-the-clock. Not only that, but you can also speed up claims processing and settlement; a timely claim settled will encourage the insured to stick to your agency or company and most likely will renew their policy due to having an excellent experience as a customer.
Better Focus on Business Growth
Outsourcing frees up you and your staff by taking over mundane, time-consuming, and repetitive tasks. With the time saved, you and your employees can focus on value-adding areas that actually add to your bottom line. For example, they can work on client servicing, resolving customer queries promptly, and generating new business.
When you save your valuable time, you get the opportunity to utilize it even better. Outsourcing helps you do that in the best possible manner.
How Does Insurance Support World Help Insurance Firms?
ISW is a globally trusted firm providing insurance outsourcing services to insurers across the globe since 2009. We specialize in bridging operational and talent gaps and have a clientele of more than 150 satisfied insurers including carriers, agencies, MGAs, and retail brokers.
Our expertise in insurance back office management makes us the best suitable outsourcing partner for insurers and can help your make outsourcing a prudent business move. For a detailed demonstration of our capabilities, service offerings, and pricing plans, reach out to us today. Call us at +1 646 688 2821 or send an email at info@insurancesupportworld.com.
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