In today’s competitive and policyholder-centric insurance industry, offering top-tier customer support over the phone is one of the best ways insurers can differentiate themselves. However, rising labor costs, a shortage of qualified talent, and other operational factors make it less feasible for insurers to manage an in-house call center.

More insurers are turning to outsourced insurance call centers as the solution. However, multiple considerations are involved in finding the right fit for the insurer and their policyholders.

Throughout this article, we’ll explore the role of the insurance call center in more detail and discuss the pros and cons of in-house and outsourced insurance solutions so you can better understand which suits your needs and strengths.

The Role of an Insurance Contact Center

The purpose of an insurance contact center is to act as an efficient communication mechanism between insurers and their policyholders, potential customers, and other stakeholders. Call center agents can generally handle various insurance matters, including policy renewals, sales, marketing, customer service, general questions or inquiries about coverage, claims processing, billing issues, and more.

Insurance call centers play a crucial role in insurance operations, supporting the overall policyholder experience through timely information dissemination, quality customer support, and effective problem resolution as needed.

In-House and Outsourced Insurance Call Centers

Insurance call centers can be managed in-house or outsourced to a specialized provider. In-house insurance call centers are owned and operated by the insurer and comprise in-house staff members. They are typically located on the insurer’s premises, and their own agents receive and handle all policyholder questions or support inquiries.

In contrast, insurance call center outsourcing is where all call center processes are outsourced to a third-party provider separate from the insurer’s operations. Such providers are often specialized call centers or business process outsourcing (BPO) companies. The call center provider hires their own employees and handles specific customer service functions on behalf of the insurer.

Pros and Cons of In-House Call Centers

In-house call centers are the traditional approach, and they can provide various benefits to insurers today in the right circumstances. Here are some of the biggest advantages of managing an in-house insurance call center:

  • Direct ownership/management: Insurers have direct control over their in-house call centers, which can help with quality assurance, training, and more oversight over interactions with policyholders and potential customers.
  • Employee expertise: Internal staff are likely to have a better understanding of the insurer’s products and offerings, making it easier for them to answer policyholder questions and inquiries and make helpful recommendations.
  • On-brand service: Because of the direct control insurers have over their in-house call centers, it’s easier for them to align call center agents with the brand’s values and mission to ensure all engagements with policyholders reflect the insurer’s message and standards.

Though there are numerous benefits of in-house call centers, there are also some critical disadvantages that insurers need to consider, including:

  • Costs: Managing an in-house call center is often more expensive, both upfront and on an ongoing basis, to cover facilities costs, staff salaries, benefits, training, technology, and more.
  • Scalability issues: Insurers can be more limited by an in-house call center when it comes to quickly scaling their service to meet surges in demand or paring down staff during slower periods, which can lead to greater inefficiencies throughout these market fluctuations.
  • Training/technology investment: Aside from the cost, staying up-to-date on the latest technology for call centers and keeping staff adequately trained on new programs is time-intensive and can detract insurers from their core operations.

Pros and Cons of Outsourced Call Centers

Just like with in-house call centers, there are some important pros and cons of outsourced call centers that you’ll want to keep in mind before committing to just one option. The following is a list of some of the pros of insurers outsourcing call center functions:

  • Potential cost savings: Outsourcing insurance call center processes can provide cost savings as insurers save on salaries and benefits for internal staff, technology investments, facility maintenance costs, and more.
  • Around-the-clock support: Many outsourced call centers provide 24/7 service, providing policyholders with the around-the-clock backing that many insurers can’t offer with just their internal resources.
  • Flexibility/scalability: Insurers relying on an outsourced call center become much more agile and able to adapt to changes in demand without the added overhead of expanding headcount for temporary surges.

Despite the countless benefits of outsourcing insurance call centers, here are some of the potential disadvantages to keep in mind:

  • Lack of control/oversight: Insurers with outsourced call centers lose some of the direct control and oversight of certain call center processes, which may provide challenges with quality control and overall messaging.
  • Dependency on a third party: Outsourcing the call center means insurers are dependent on a third party to deliver a crucial aspect of their business. Any issues the third-party provider experiences can significantly impact the insurer’s customer service abilities.
  • Communication challenges: Depending on where the outsourced provider is located and whether it’s an onshore or offshore operation, there may be issues with communication due to time zone differences or language barriers.

A Strategic Guide to Choosing Your Ideal Call Center Solution

Every insurer needs to consider the unique factors of their business and policyholder needs before selecting either an in-house or outsourced call center. Each approach has distinct pros and cons, so insurers should choose the option that best aligns with their goals.

Insurers who decide to outsource customer support can consider partnering with Covenir BPO. Our specialized onshore team offers scalable phone support so you can focus on strategic operations while we provide the on-brand service your policyholders have come to know and expect from you.

We help you offer the proactive policyholder experience necessary in today’s highly competitive and fast-paced insurance market. Grow and thrive in the modern insurance landscape with Covenir BPO. Let’s talk about how our custom-tailored solutions can transform your operations.