Business Process Outsourcing For Insurance Companies

Outsourcing (BPO) is a situation whereby a company hires an intermediary provider to handle a number of its daily business operations. Outsourcing began in the manufacturing sector, but has gained popularity in other segments especially the insurance sector. This is because it is a critical and valuable tool that promotes efficiency and stimulates productivity. It's an important factor, especially when hiring and maintaining experienced staff has become expensive and difficult. Outsourcing is the fastest and most efficient method of consolidating disparate data processes and technologies that results from acquisitions. For insurance companies whose strategic goal involves establishing a global niche and exponential growth, outsourcing provides a much needed boost.

The following are the various types of services an insurance company can outsource:

  • Accounting
  • IT Services
  • Print-Mail Services
  • Customer Service
  • Payroll and Processing of Payment
  • Carrying out of product research and value assessment

Advantages of Outsourcing for Insurance agencies

1. Flexibility & Scalability

Outsourcing companies provide an insurance agency immense flexibility to adapt to competition in the insurance sector and alterations in regulatory compliance, allowing the company to adapt to evolving market conditions.

Business Process Outsourcing is ideal for an insurance agency: the services provided are tailored to fit your precise business requirements. As your company undergoes transformation and increases productivity, an outsourcing provider will have to scale up their own production and evolve with changing demands. Having the ability to adjust your business operations will assist your company remain agile and meet your growth projections.

2. Optimum use of manpower

Outsourcing allows the employees of an insurance agency to concentrate on the core competencies of the business. An insurance business will experience growth only when there is a collective effort from its employees. As the demands of your firm multiply, you will expect your employees to focus on business efforts instead of being tied down by clerical assignments. Outsourcing will prove to be invaluable because the provider will manage and process documents. This will allow your staff to remain focused on vital aspects of your business.

3. Reporting, Compliance management and Regulations

Insurance regulations and laws are dynamic. There is a need for your agency to bring up to date its customer-facing documents and at the same time continue with normal business operations. An outsourcing provider will adjust your insurance documents and allow you to supervise your business operations effectively.

The cutting-edge technology reporting tools and increased security provided by outsourced Print Management Companies will enable an insurance agency ascend the echelons of compliance management.

4. Access to more resources and innovative technology

Outsourcing provides multiple channels through which the firm can interact with its customers and hence increasing efficiency and security.

Outsourcing makes more efficient the billing process of an insurance agency by speeding up process of customers accessing their data and pay bills because a provider will present customers with electronic bills. The provider may also integrate the agency’s online service with their payment portal. This provides a vital contact point through which customers engage with an insurance firm.

5. Reducing cost of doing business

The costs for document processing and printing can be astronomical for an insurance agency. Outsourcing these services will assist you to reduce your firm’s expenses significantly and communicate efficiently with your customers.

Outsourcing instills high operations efficiency in an insurance agency and offers tax savings. This will lower the cost of business operations.

6. Data backup and disaster management

Outsourcing companies provide backup of a firm’s sensitive data. This ensures the business keeps on running and information on customers remains safe irrespective of whether there is a server failure, data breach or power outage.

Outsourcing will enable an insurance agency to innovate cheaply and hire various specialists rapidly, thus increasing its market niche. It’s hard not to pay attention to the advantages of outsourcing to the insurance sector. Simply put, it will increase the efficiency of an agency, reduce business costs and streamline its operations

Please login to view this lesson.

With our free registration, you can access to all the lessons on finance, risk, data analytics and data science for finance professionals.

Sign in free