Insurance
Trends in insurance outsourcing
Insurance process outsourcing is growing at a fast speed. A research report finds that the market size of business process outsourcing (BPO) in insurance was $5.8 billion in 2020. The growth projection is at a CAGR of 4.2% or $10.2 billion by 2028.
Outsourcing is not limited to data entry. It takes the lead in handling intricate responsibilities such as managing policies and commissions, processing claims, overseeing accounting tasks, managing agencies, and providing legal services. By outsourcing these processes, insurance companies access the necessary infrastructure, global talent, and modern technologies in the industry.
This article will explain what processes insurance companies typically outsource and the future trends one should look out for in the industry.
Which skills and capabilities should you outsource?
We must admit the acute shortage of talent in the insurance sector. This is due to a quarter of the workforce retiring over the next decade and a lower number of fresh graduates seeking an insurance career.
Outsourcing partners handle numerous processes across the insurance lifecycle, including but not limited to –
- Submission-to-issue tracking
- Policy serving
- Claims handling
- Quality assurance
- Policy renewals
- Tax reporting
- Data analytics
Insurance companies choose to keep their core activities, such as underwriter evaluation, in-house, as that plays a key role in covering risks and in bringing cash.
By outsourcing the other processes to the experts, businesses can focus on serving their customers better and growing their books. They can also access cutting-edge technologies such as artificial intelligence (AI) and robotic process automation (RPA), which will be extremely difficult to implement in-house.
5 Trends in life insurance outsourcing
With a rapidly changing insurance landscape, companies need to adapt their operating models, core processes, and products. These 5 trends will individually or collectively have a major impact on insurance outsourcing –
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Artificial intelligence
As AI creates and commoditises algorithms, insurance businesses will fundamentally redesign their core processes. From insurance distribution to underwriting to claims, AI will make the processes predictive. Service providers will use AI to derive meaningful insights from data sets of claim history and client interactions to create new products.
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Distributed infrastructure
Expensive on-premise legacy hardware is a huge burden on the global insurance businesses. Cloud technology is shifting the focus from having on-premise hardware to using the software as a service (SaaS).
Cloud infrastructure will make launching new products, accessing better computing power, and securely managing data cheaper and easier. Cloud-native insurers will spearhead the future of the industry and act as a connecting hub among distributors, consumers, healthcare centres, reinsurers, carriers, and more.
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Process automation and virtual operations
Technologies such as robotic process automation (RPA) will automate and significantly scale repetitive tasks in the back office, such as form filling. This will release your team for tasks that require human intervention and analysis.
On the client’s side, the Internet of Things (IoT) technology will monitor the equipment in real-time and alert for any proactive maintenance before any damage and claims happen.
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Connected systems
Wide adoption of IoT technology will reshape the core products in the life, property, health, and commercial insurance businesses. IoT will increase the frequency and accuracy of customer data that will help insurers assess the risk better before issuing a policy and while it is in force.
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Risk management
Insurers handle some of the most sensitive information about customers, such as medical records, treatment history, information about family members, income proofs, etc. As insurance products evolve, customers may share much more personal information with their service provider.
Blockchain technology will provide resilient networks and protection against cybercrimes. This will help insurance carriers manage customer data effectively and safely.
These technology trends, in many ways, will reshape the insurance industry and will pose an existential threat to players that do not adapt. Insurers must act now to make their organisations and processes technology-focused. Technology transformation must be the primary agenda for the leadership team as they fundamentally reengineer their products and services to remain competitive in the market.
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How can Infosys BPM help in Outsourcing Insurance Services?
Infosys BPM has helped insurers significantly reduce their OPEX by transforming their business processes in line with the trends above. With 33 LOBs, including property insurance, general liability insurance, medical professional liability, and more, Infosys BPM covers a vast spectrum of industries.
Read more about the insurance process management outsourcing services at Infosys BPM.
