For those operating with the insurance BPO model, 2024 is set to be a year full of evolution and growth. Heading into the new year, the insurance BPO market is valued at $7.75 billion, with an expected CAGR of 3.93% until 2027. This promising outlook for the insurance BPO space is encouraging for providers, though there are some important trends and shifts they’ll need to be aware of as they navigate the coming year.
From macroeconomic factors to industry-specific shifts, the following trends reflect some areas we expect insurance BPO providers to focus their efforts on in the new year.
Emphasis on Policyholder-Centric Service
Across the board, insurance BPO providers will be focused on offering more policyholder-centric services in 2024. Though this has been an ongoing trend over the past few years, the upcoming year will see this trend continue to accelerate and become the new norm across the industry.
For BPO providers, this may include offering more personalized interactions with policyholders, supporting quick and efficient FNOL and claims processing, and providing omnichannel support–all of which work to enhance the policyholder experience and boost retention for insurers.
Offering a more policyholder-centric service is possible through the growing amount of data available on policyholders today. BPO providers can leverage this data to deliver tailored services and support that modern consumers seek in 2024.
Greater Adoption of Artificial Intelligence (AI)
The adoption of advanced technologies like artificial intelligence (AI) and machine learning (ML) will likely grow throughout the insurance BPO space in 2024. While these tech advancements will never replace the need for the human touch in insurance processes, they can complement insurance BPO providers’ staff by handling repetitive or time-intensive tasks that can help them boost efficiency and enjoy cost savings.
The traditional BPO model of insurers leveraging human expertise from third-party providers will remain. However, the growing prevalence of AI use in the industry, especially by insurance BPO providers’ clients, means these companies must adapt to the changing environment to support insurers’ digital transformation efforts over the coming year.
Continued Staffing Challenges
What has been an ongoing trend of staffing challenges seen across the insurance space is expected to continue into the new year. This persistent trend has impacted insurers for several years, allowing insurance BPO providers to step in and fill the gaps where insurers may not have the time or resources to devote to recruiting and hiring.
Especially for more high-skill tasks like underwriting support and risk management, insurers are facing a mass exodus from the industry as a whopping 50% of current working insurance professionals are expected to retire in the next four years.
But, business continues to grow for insurers despite these challenges, only exacerbating their need to fill job vacancies–which is where the insurance BPO model can help. More specifically, 72% of insurers expect revenue growth in 2024. At the same time, 65% of P&C insurers expect to boost staff numbers over the coming year.
Thus, to overcome these staffing roadblocks, many insurers will turn to BPO partners to gain the people support they need to sustain their growing operations. It’s true that insurance BPO providers themselves are facing similar labor challenges. However, many BPO partners can tap into a wider network of skilled insurance talent, while many individual insurers are limited to their distinct geographic regions.
Growing Importance of Data Privacy and Security
As the world grows increasingly digital, consumers are now more aware of how their sensitive data is being stored online, who has access to it, and what the risks of a potential breach are.
Given the nature of the BPO model, these providers, alongside insurers, handle a growing volume of personal policyholder data. Thus, in 2024, BPO providers will need to focus more on their data privacy protocols and procedures to safeguard consumer data and meet relevant compliance standards.
Strict compliance with data protection regulations will be a high priority for many BPO providers in the new year as they look to foster trust with insurers and policyholders. In turn, cybersecurity will likely be a common focus area for many across the insurance space over the coming months.
Partner with Covenir BPO for 2024 Excellence
Covenir is a trusted partner to insurers and MGAs of all sizes, helping our clients gain the people power they need to succeed in today’s dynamic marketplace.
Though the year ahead may be uncertain for insurers, Covenir acts as a reliable partner, delivering transparent frontline support, policyholder communications, and efficient back-office support as needed. Our specialized onshore teams have the industry experience and knowledge to provide the service your policyholders have come to know and expect from you.
If you’re interested to see how Covenir can help you navigate the year ahead with precision and expertise, reach out to our team today.