Business process outsourcing (BPO) solutions have been widely used in the insurance industry for decades, providing operational efficiencies and allowing providers to focus on what they do best.
BPO partners take care of various functions – like claims processing, policy administration, back-office support, and customer service – with expertise and precision, freeing insurers to invest in their core competencies. As the industry becomes increasingly competitive, there’s a growing list of reasons why insurers choose to work with the right BPO partner.
Below, we’ll discuss the current state of the insurance BPO market, the benefits of working with the right partner, and what trends lie ahead.
The Current State of the Insurance BPO Market
The insurance BPO industry is set to top $8534.9 million by 2028, up from $6327.5 million in 2021–showing a CAGR of 4.3%. Insurers increasingly see the operational efficiencies and cost-saving benefits of partnering with an experienced and specialized BPO provider.
The Benefits of BPO Services
There are many advantages to partnering with the right BPO provider, including the following:
- Cost Savings & Efficiencies: Working with a BPO partner reduces operational costs and improves profitability for insurers as they streamline the back office.
- Scalability: BPO providers offer scalability and flexibility, allowing insurers to grow with speed and agility while accessing highly specialized resources and expertise. All of this is possible without hiring talent or investing in new technology.
- Enhanced Policyholder Experiences: Partnering with a BPO provider helps insurers enhance the policyholder experience by providing faster, more accurate, and more personalized service. This can help improve policyholder satisfaction and loyalty.
- Innovation: The best BPO partners have a concentrated focus on growth and innovation, providing cutting-edge services to help keep insurers ahead of the curve.
Future Trends in the Insurance BPO Market
As the insurance landscape continues to evolve, several trends are working to advance the BPO market. BPO providers will need to keep their pulse on these ongoing trends and find ways to adjust their service to provide efficiencies and an enhanced policyholder experience.
Policyholders are increasingly demanding personalized services tailored to their needs. BPO partners will continue to help insurers enhance the policyholder experience through hyper-personalized services and deliver custom service packages that meet clients’ unique preferences.
The ability to offer such personalization relies heavily on having the right expertise and processes in place. In practice, this can look like storing and utilizing information on policyholders’ preferred method of communication, which shows them that their insurer pays attention to their preferences. It can also look like providing timely service in multiple languages to meet policyholders’ needs, which can be challenging to support in house.
Analytics & Insights
The BPO space will increasingly rely on data analytics to serve policyholders. More consumer data is available today than ever before, posing a unique opportunity for insurers to gain deeper insights into their policyholder’s needs and tailor their offerings accordingly.
Capturing these opportunities relies on the ability to efficiently analyze patterns and trends. The best BPO partners have a team of experts who can help insurers use their data to improve process efficiency, risk management, personalization, fraud detection, and more.
Further digitization of the insurance market will pose challenges and opportunities to BPO providers. Adopting cutting-edge technologies like artificial intelligence (AI) and machine learning (ML) aid their ability to provide quick and efficient service.
Specifically, these technologies are instrumental when automating repetitive and manual tasks, reducing processing times, and improving accuracy, all of which help boost efficiency and cost savings. However, investing in these technologies requires sufficient resources, which BPO providers should be prepared for over the coming years.
Another trend gaining momentum is data security. Data breaches can be very costly–in fact, the average data breach cost $4.35 million in 2022. Add this to the increased regulatory scrutiny on providers with access to sensitive user data, and you get a unique environment for BPO partners.
With growing concern around data security, insurers will likely become more concerned about data security, seeking out partners with specialized knowledge or expertise. BPO providers must comply with such regulations, which may result in significant investments in cybersecurity measures, reporting, and auditing.
See the Advantage of BPO Solutions with Covenir
While the insurance BPO market is slated for growth over the coming years, partners and insurers alike will need to adapt to trends to stay ahead of the curve.
Covenir’s team of on-shore, forward-thinking BPO experts can give you more time to focus on strategic growth initiatives while feeling confident that your policyholders receive on-brand and reliable service. We have extensive industry experience in premium services, customer service, FNOL and claims, underwriting support, policy advising, print and distribution, and virtual mailroom services.
Contact us today to see how our turnkey solutions can give you the people power you need to grow and navigate the modern insurance market.