Insurers everywhere are dealing with unprecedented market conditions, a changing regulatory landscape, and rising competition. These factors work together to push established carriers and new startups to find operational efficiencies and stay agile.
As a result, many forward-thinking insurers are turning to business process outsourcing (BPO) solutions. Though the insurance BPO space is quickly growing and set to see a CAGR of 4.8% from now until 2028, some insurers are still unaware of what exactly BPO is and how it can help them. Keep reading below as we discuss insurance BPO in more detail.
What is Insurance Business Process Outsourcing?
BPO is a way for insurers to partner with a team of experts who complete a portion of their back-office tasks. Insurance BPO providers can offer a wide range of services, with the scope often being tailored to the individual insurer's needs. Such services may include:
- FNOL and insurance claims management
- Policy administration
- Customer support
- Product sales advising
- Underwriting support
- Virtual mailroom/print distribution
- Premium services
The Power of Insurance BPO
Working with a BPO partner helps insurers unlock incredible value they wouldn't be able to with their in-house team alone. Here are some of the top benefits:
Efficiency and Cost Savings
By outsourcing their labor-intensive back-office work to skilled experts, insurers can complete more tasks in less time and at less of an overhead cost. Rather than going through the expensive process of recruiting, hiring, and training in-house workers, they can simply partner with a BPO provider to access a flexible workforce that fits their needs.
Better Policyholder Experiences
Given the competition in the field today, one poor interaction is all a policyholder needs to switch providers. About 50% of consumers have switched insurers due to poor customer experience. In contrast, when insurers provide personalized service, they can see policyholder engagement levels boost by nearly 90%!
If the insurer's in-house team is already at capacity with underwriting tasks, policy management, and more, the customer support side of things can quickly slip. The right BPO provider can seamlessly provide the on-brand, personalized service that policyholders expect. The best partners also offer round-the-clock support in various languages, further enhancing the policyholder experience.
Specialized Skills and Knowledge
Outsourcing insurance processes gives insurers access to a resource pool of experts without being limited by geography. Additionally, insurance BPO providers tend to use cutting-edge technology for further cost efficiencies and operational benefits. Rather than updating their tech stack to take advantage of new advanced tools, insurers can work with BPO partners who already have sophisticated technologies on hand and know how to make the most of them.
Compliance and Security
As insurance regulations continue to become more complex, many insurers find themselves lacking the time and workforce needed to meet additional reporting and documentation requirements. By outsourcing some of their more tedious, time-consuming tasks to a team of BPO experts, insurers can free up their internal teams for critical compliance tasks.
Agility Made Simple
BPO services give insurers access to a flexible workforce that can seamlessly scale up or down as needed to meet demand. They can easily scale up when volumes and demand spike and easily scale down to retain profitability during slower periods. Outsourcing also gives insurers' teams extra time and capacity to focus on more value-add tasks and strategic planning to meet evolving consumer demands and market trends.
Finding the Right Insurance BPO Partner
While there are many insurance BPO providers out there, they don't all have the same expertise areas or offer the same advantages. Here are a few tips for finding the right fit for your business:
Evaluate Their Expertise
Insurers should first evaluate the expertise of the BPO partner they're interested in working with. This can include reviewing any case studies or results they've generated for similar insurers in the past. Overall, insurers should dig into their reputation in the insurance industry to see if they're worth pursuing further.
Assess Their Service Offerings
If insurers are looking for support in a specific service area, it's best to seek partners with qualified talent to support those processes. They'll need to consider what areas the BPO provider is most familiar with and ensure it aligns with the specific services and solutions they require assistance with. Insurers should also assess how easily the BPO partner can scale capacity to meet higher demand.
Consider Technology Integrations
Another important consideration is whether the technology and software that the BPO provider utilizes will easily integrate with the insurer's workflows. The more seamless integration can occur, the better. At the same time, insurers should inquire about the data security measures the BPO partner employs to ensure it meets their standards and regulatory requirements.
Calculate the Financial Feasibility
When evaluating potential BPO partners, insurers need to assess the financial feasibility of the partnership. It can be helpful to evaluate and compare the cost structures of various providers to find the right fit. Do they charge a fixed cost? A variable cost related to volume? These are all important questions to dig into.
Look Ahead at the Ongoing Relationship
After all other factors have been considered, insurers should consider what their ongoing relationship will look like with the provider. This can include setting up ground rules and expectations for regular check-ins, setting up contact points at each company, and determining what communication will look like between the two teams. This can be a great way to make a final assessment of the culture fit and ensure that processes will run smoothly.
Ensuring Insurance BPO Success
While choosing the right partner is a critical key to success, insurers need to continue evaluating the partnership to ensure it meets their operational standards. The key performance indicators (KPIs) that an insurer may monitor can vary depending on the service that they outsource, but some of the main KPIs may include:
- Policyholder satisfaction rates
- Policyholder retention rates
- Claims processed per hour
- Policy issuance turnaround times
- Response time to policyholder inquiries
Insurers that outsource a portion of their operations can drive excellent business value and improve policyholder experiences. However, finding the right partner and ensuring they continue to meet a high standard of service is critical to long-term success.
The Covenir Way
Working with a premier BPO partner like Covenir gives insurers the qualified people power they need to focus on strategic workflows that promote business growth without letting the policyholder experience suffer in return. With personalized, on-brand service that you can trust, Covenir seamlessly integrates with your team so you can focus on innovation while we keep your policyholders engaged.
Contact us today to learn more about how we can tailor our solutions to provide you with the support you need to stay agile in today's ever-changing marketplace.