While outsourcing has always been a well-recognized concept in the insurance sector, it was considered an add-on in the pre-Covid days. Regardless of the tangible gains it delivers, it was still an ‘optional luxury’. The catastrophe posed tough questions to insurers in the form of spiking death claims, investment portfolio losses, a slowdown in sales and premiums, and operational risks around business continuity, cyber, litigation, fraud, and employee shortage. For insurers, the ideal response lies in fostering business resilience for the future by striking the right synergy between the internal and outsourcing teams.

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43% of insurance consumers in the US lack confidence that they would be treated fairly by their insurers when they have a claim.

Post-Covid Trends that Make Insurance Process Outsourcing a Necessity

Focus on the Individualized Needs of Consumers

In 2021, insurers would be faced with evolved consumer needs. Factors such as the ongoing financial hardships of people, demand for behavior-based insurance products, personalized and targeted offerings, etc. would surge in 2021. Considering the current state of most players, it is beyond the capacity of the already overwhelmed internal team to deliver on such expectations, making outsourcing a logical move.

The Skyrocketing Demand for Digitization in 2021

The pandemic has taught insurers a lesson on the need to establish a foolproof consumer digital strategy. The need of the hour is seamless digitization throughout the policy lifecycle, from marketing to sales to claim submissions to digital policy servicing. As most insurance workflows were driven by manual processes in the pre-Covid days, a massive initiative like digitization calls for the technical expertise of a competent outsourcing partner.

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In 2020, digital adoption in the insurance industry increased by 20%.

The Possibility of an Increase in Severe Claims

In tandem with Covid-19, the U.S. also faced record-breaking figures of other natural catastrophes over the past year. Recent weather trends and signs of climate change suggest the insurers are likely to encounter a sharp increase in the frequency and severity of disaster-related claims. This makes it crucial for them to assess risks accurately and implement proactive strategies to manage operations, and hence, seek help from an insurance services firm.

In a survey (December 2020) of insurance consumers in the US, it was found that 21% of the respondents were hit by natural disasters over the last 12 months.

An Outsourced Team Complements the Efforts of the Internal Squad

For the leaders in the sector, outsourcing is a magic wand to reinforce the capabilities of their employees and boost their outputs for the attainment of business objectives. In 2021, outsourcing teams would be pivotal in ushering insurers to the future and amplify the performance of their in-house counterparts.

Introduce Digitalization for Alternative Work Arrangements

The pandemic confined insurance employees to their homes, and the need for a remote working setup was desperately felt. For sustainable growth in 2021 and beyond, the insurance sector must seriously pursue digitization. The workforce must be digitally equipped to cater to the evolving needs and expectations of the consumer even in the face of another pandemic-like situation.

  • An outsourcing firm leverages automation to relieve the in-house team of repetitive back-office tasks such as premium/claims processing, policy management, claims management, etc.
  • Digital workflows enable insurers to virtually coordinate with stakeholders, including underwriters, agencies, clients, and prospects, saving hugely on time and other resources.
84% of insurance consumers want to deal with an insurance advisor/agent either online/digitally or over the phone.
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Share Operational Load Implications

The economic impact of the crisis forced most insurers to trim their workforce substantially (even the core team). Since their finances remain delicate, insurers are exploring external help options to negotiate the workload surge as they attempt to regain their lost traction in the market. The need to grab opportunities while keeping the operational expenses in check makes outsourcing the way out.

  • With an insurance services firm taking the reins of the repetitive and resource-hungry back-office jobs, the in-house team gets the space to focus on their post-Covid plans and offerings.
  • The core team gets time to strategize better and hire employees at ease. The partner firm sets up standard workflows and can help train the in-house staff for new operational challenges.

Leverage Data to Analyze Opportunities and Threats

The massive streams of data generated regularly in the insurance sector mostly go untapped when they can reveal volumes about business opportunities and risks. In the post-Coivd era where competition would be at an all-time high, lenders must harness data to assess the potential of their strategies. This gives the internal team the right direction to pursue the organizational objectives.

  • By analyzing relevant data, partner firms can help the in-house team to fine-tune its performance. They can identify and address bottlenecks in underwriting, policy checking, claims administration, etc.
  • Partner firms are helping insurers with cutting-edge technologies such as AI and Big Data for automating tasks, predicting future trends and risks, and improving the customer service workflow.

The Biggest Draws for the Internal Side in 2021

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Although delegating tasks to an external team might seem like underplaying the role of the internal crew, in reality, outsourcing empowers the in-house members and frees them up from the less-fulfilling jobs. Often, the outsourcing partner, with its technical and domain expertise, plays second fiddle to the interests of the internal team.

A Productivity Boost to Take on the New Era

With most tasks automated, the internal team can focus on areas that require cerebral intervention, assess their performance, and make the necessary recalibration. The management can now direct their efforts solely toward the activities of sales and support and gain the consumer’s approval in 2021.

Business Flexibility that Characterizes the Post-Covid World

Custom services and solutions offered by outsourcing partners inject flexibility into the insurance workflow. With most of the firefighting actions delegated to the partner firm, the client can work on new products and markets to scale the business without investing much in additional resources.

Assure Stakeholders of Data Safety

Safe and efficient management of business data would be of supreme importance for insurers in 2021. Outsourcing firms offer robust digital solutions that protect the sanctity and integrity of insurance data from fraudulent access and unauthorized use, making life easy for the internal team.

To chart a come-bask, the hard-hit insurance sector must undergo certain fundamental changes to its work structure. One of those is to delegate most of their back-office services to capable insurance services firm. This is a key tactic to reduce the time-consuming tasks of the internal team, and at same time, give them a more responsible and accountable role of working in tandem with the partner firm to scale new heights in 2021 and beyond.

Amid the COVID-19 crisis, the value of the global insurance BPO market that was estimated at US$6 billion in 2020, is projected to touch a revised figure of US$8.

Who We Are and Why Our Expertise Matters

At Insurance Back Office Pro, we have been offering quality back-office services to insurers for over a decade now. Our services around loss run processing, policy checking, underwriting, etc. help the client’s team to focus only on the core revenue-generating areas of the business. Our custom service packages helped client teams to continue operations even during the peak of the pandemic. With our state-of-the-art infrastructure and years of domain exposure, we are on a mission to enable insurers and insurance employees to attain unprecedented levels of productivity in 2021.