Dealing with uncertainties and mitigating risks is the core job of the insurance industry — and so skepticism is naturally inherited by insurers. However, today’s challenges are massively different from past years.
Digitization is spawning all sorts of disruptions, including high customer expectations and new types of competitors, while regulatory compliances keep increasing the complexities.
It seems that dust is far from settling. Being reluctant about new business practices that drive to outdated technology, abrupt changes in consumer patterns, and compliance issues, insurers are genuinely making innovative strides through customer-facing touchpoints. Yet the ability of an insurance company relies on BPO support.
If you are also struggling with the same problem, it’s time to opt for insurance BPO services.
Insurance business process outsourcing services maximize operational efficiencies, focus on core activities, and cut out flab that brings down growth and profitability. Whether it’s a big insurance company or a small one, everyone would agree that the back office is consuming a massive amount.
Benefits of Insurance Business Process Outsourcing
According to recent statistics, the insurance BPO market, which was valued at US$ 5,924.10 million in 2021, is projected to reach 8534.9 million US dollars by 2030. This growth can be attributed to the increasing trend of companies and insurance firms forming partnerships with specialized outsourcing service providers to handle specific business functions.
Let’s dive into the benefits of insurance BPO services:
- Save on costs
One of the major benefits of outsourcing is cost reduction. How? Do you know the key differences between the front office and the back office? The front office has all that drives revenue, whereas back-office functions do not make any money. While insurers are optimizing and redefining their office processes to maximize revenue, the goal of business process optimization in the back office has to be cost reduction.
So, when you opt for insurance business process outsourcing, there’s zero investment in infrastructure, onboarding new talents, and providing equipment. It makes complete sense to allow a reliable provider to take care of your back-office tasks.
- Flexible resource management
Flexible resource management is an advantage of outsourcing insurance back-office services. For instance, a health insurance company hires back-office staff to process claims. They need to provide space, train, recruit, and provide equipment.
Fluctuations in claim volumes are common, resulting in either inflated overtime wages or idle time for in-house staff. However, three months later, the client jumped ship. You no longer have work available for your new employees, and you’ve already invested significant cash in training these people.
This is where outsourcing helps to eliminate the need for full-time employees during slow periods or excessive pay during busy periods. Back-office service providers offer cost-effective rates and the flexibility to pay only for completed work.
- Access to advanced services and technology
Insurance BPO services allow companies to save on capital investments by utilizing the existing capabilities of the outsourcing firm.
For instance, a health insurance company needs to establish a claims processing department. That being said, purchasing an expensive OCR software license will be needed to process, ranging from $100 to $500 each.
By outsourcing the claims processing function to a specialized firm already equipped with the necessary software and trained employees, the health insurance company can leverage the existing technological capabilities and expertise, resulting in significant cost savings.
Moreover, these service providers are core technology enablers that use data analytics to extract meaningful insights from vast amounts of data, enabling you to make accurate predictions and tailor insurance policies as per customer needs.
AI is playing a crucial role in automating processes, improving customer digital experience, and identifying fraudulent claims. On the other hand, telematics is assisting insurers collect data from sensors installed in vehicles and evaluate drive behavior to price policies smartly.
Outsourcing partners leverage these advanced tools to deliver personalized services to insurers so that they can offer customized services to their customers.
- Expand business and service offerings
Outsourced back-office services provide businesses with 24-hour access to a flexible and cost-effective labor force, unlocking new opportunities.
Investment firms, for example, can leverage the low costs of outsourcing equity research to gather data on a significantly more significant number of companies than they could handle in-house. This leads to more comprehensive reporting and improved identification of investment opportunities for clients.
How to Choose the Right Insurance BPO Service Provider?
Before we move ahead with choosing the right insurance BPO service provider, you can outsource policy management, claims management, insurance agency back-office support, legal support, insurance analytics, insurance accounting, BI, and visualization tasks.
Now let’s dive into the steps that you should take when hiring an insurance BPO service provider for your insurance firm:
- Established reputation
An esteemed track record is a crucial aspect to consider when selecting an outsourcing partner. Trusted by numerous businesses, they prioritize service quality, consistently earning positive feedback. In today’s interconnected world, negative reviews are hard to overlook. Thoroughly research and conduct background checks to ensure complete confidence before agreeing.
- Transparent budgeting
Transparency in cost presentation is a significant factor in outsourcing. It plays a pivotal role in forging successful partnerships. Premium outsourcing companies are associated with higher pricing, reflecting their exceptional services. However, smaller outsourcing firms typically offer more affordable options.
- Flexibility in partnership
Choosing the right outsourcing partner that demonstrates flexibility is essential for tailored services. They should be adaptable to meet your specific requirements and capable of providing urgent support before formalizing an agreement.
- Ask for a consultation
If you wish to test the company’s services before committing, inquire about a free trial. The free trial will provide valuable insight into whether the company fits your needs.
A reputable provider typically offers a free trial period, and taking advantage of this opportunity is highly recommended. Failing to do so may hinder your understanding of how the company operates.
In the past, paying for a trial may have been necessary, which might not have been feasible for everyone. When seeking an online store, the best approach is to visit their website and explore. This allows you to determine whether the company offers a complimentary trial.
Optimize. Evolve. Transform
By adopting a strategic mindset towards insurance BPO services, insurers can pave the way for profitable expansion. Aligning business objectives with operational strategies facilitates achieving goals, enabling staff to concentrate on high-value tasks.
Enhanced accuracy and efficiency in processes mitigate non-compliance risks and elevate service levels. Furthermore, sales teams can capitalize on broader opportunities, driving overall growth.