In the ever-changing insurance industry, insurers are constantly seeking out new ways to optimize performance and improve operational efficiencies. As the space grows more policyholder-centric, insurers need to be strategic with how they stand out from their peers and meet the evolving needs of consumers — all while staying nimble and agile.

One way insurers can achieve this is by adopting a hybrid talent model, which merges the strengths of in-house teams with the specialized skills of outsourced providers. By leveraging this blended approach, insurers can navigate challenges with greater agility while ensuring premium policyholder experiences and sustained growth.

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What is a Hybrid Operational Model?

In the business world, a hybrid operational model means an organization relies on an in-house team and outsourced service providers to run operations. For insurers, deciding which team handles which workflows can vary depending on the unique skillsets and experience of their internal team and the areas where they require more support.

For instance, one insurer may be known for its excellent underwriting practices that they handle in-house but don’t have the capacity or resources to offer quality customer support, which they outsource. In a different scenario, an insurer might have an excellent team of sales advisors and customer service agents internally but could use external support with policy issuance and management.

The Evolving Needs of the Insurance Sector

Over recent decades, the insurance sector has been undergoing a massive shift. Such changes are largely due to the ongoing digitalization efforts that have taken hold across the industry, challenging incumbent players who were historically slow adopters of new technology.

But, as society as a whole becomes more digitally focused, insurers are feeling the pressure to keep up and continue to meet policyholder demands as they evolve. In other words, they must adapt or risk sacrificing market share to new players and other established insurers that are changing how they operate.

Today’s policyholders expect more personalized and convenient service from insurers. They want the ability to access their policy details, make changes, and file a claim on their own terms. However, it can be challenging for insurers to become more accessible and present online, given external pressures like a tight labor market or rising costs from inflation that challenge their profitability.

Hybrid models allow insurers to take advantage of their internal strengths while utilizing cost-effective outsourcing to expand operations as needed to meet the demands of the modern market.

The Advantages of In-House Teams

Insurers’ in-house teams are deeply embedded in the organization and thus offer incredible value. They have a good understanding of the company’s culture, vision, and needs, delivering on the insurer’s mission with precision and dedication.

Internal staff are often highly aligned with the company’s goals and can help with quick decision-making and thoughtful oversight of workflows that back the insurer’s mission. Above all, in-house teams build and sustain the company’s culture, creating a sense of camaraderie and shared purpose that translates into a premium policyholder experience.

The Strengths of Outsourced Teams

On the other hand, outsourced teams can provide insurers with skills they may not be able to access internally. For starters, most outsourced insurance teams are dedicated specialists in a specific workflow like underwriting, claims processing, or customer service. They often possess extensive industry knowledge and expertise.

Outsourced providers can bring a fresh outside perspective and innovative solutions to help insurers navigate changing market dynamics and consumer demands. Additionally, these teams are often scalable, offering flexibility for insurers based on their needs — in surges and slow periods. Because of this, outsourced providers are typically cost-effective for insurers to utilize. Overall, delegating specific workflows to outsourced teams can allow insurers to focus on their core competencies and optimize their operations.

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Challenges and Considerations with Outsourced Teams

Though there are plenty of benefits to working with outsourced insurance teams, it’s important to be aware of some of the challenges that can arise for insurers with this arrangement. With proper preparation and planning, these pitfalls can easily be avoided.

There is always a concern about quality control and that outsourced providers will not offer the same level of service that the insurer’s internal team would. There are ways to implement quality control measures to ensure the provider meets the insurer’s standards, including regular reporting and clear communications between the two teams.

Insurers should also select the outsourced provider with the right cultural fit for their organization, which will help operations run smoothly. Similarly, finding a provider that is well-versed in relevant data security and privacy regulations and implements the latest technology is favorable for forward-thinking insurers.

Partner with Covenir BPO for Expert Insurance Outsourcing

Covenir BPO offers expert insurance outsourcing services for a number of key workflows, including FNOL and claims processing, customer support, product sales, premium services, underwriting support, and more.

Wherever you need us to integrate into your operations, we seamlessly become part of your team to deliver an exceptional policyholder experience while you focus on future growth and innovation for the business.

In today’s marketplace, leveraging the power of an outsourced provider like Covenir BPO alongside your dedicated internal team creates a winning combination that your policyholders will recognize and appreciate. If you want to stand out in today’s crowded marketplace while retaining your efficiency and agility, contact Covenir to learn more about our outsourced insurance services.

Learn more about outsourcing a portion of your ops!