Due to the changing market drivers and stringent regulatory norms, substantial changes are occurring in the insurance sector. The heavy competition in the insurance sector has given rise to various operational challenges such as improving turnover ratios and their activity along with establishing a pricing model that remains competitive. However, insurance companies could minimize operating expenditures and streamline back office operations, by utilizing the potential of business process outsourcing (BPO).
Outsourcing also allows the insurance companies to carry out their daily functions by forming a robust foundation of profitability and growth. Outsourcing helps insurance companies reduce costs, survive any economic uncertainty and set a concrete stage for future expansion and growth. In fact, insurance companies often use outsourcing for different aspects of their operations ranging from business processes which include claims handling and underwriting to various other systems which reinforce those functions. Some of the advantages of outsourcing are that it helps stimulate productivity and facilitate growth and allows employees to focus on important tasks.
The following are some of the ways in which BPO can help insurance companies boost their performance as well as productivity:
- Customer Support Services – A reliable back office service provider will offer best-in-class inbound and outbound solutions which enable insurance companies to meet regulatory requirements and enter new markets by providing superior services, and also maintain customer loyalty. Insurance companies can utilize call centers to manage customer queries and concerns via multiple channels including email, voice and chat on a round-the-clock basis 365 days a year. In fact, customer queries and concerns vary from questions regarding pending claims, endorsements to a request for their policy statement. Call centers can also be used to follow up until the claim is over by reaching out to the customer when the claim is filed. A single customer service representative (CSR) can be assigned the follow-up task and to see through the whole process until the end. During the sales process, CSRs can explain various coverages to the customer.This in turn helps the customer become familiar with what aspects the insurance policy covers. In addition, call centers can provide emotional support, as insurance claims at times can be quite upsetting and emotional for the customers. Call centers can also play a crucial role in boosting the trust of the customer with the insurance company.
- Data Processing Services – Data processing is one of the most critical functions that insurance companies have to carry out throughout their operations. As companies grow,their data processing requirements also grow. This in turn causes companies to buy more computers and other technology related equipment and begin a cycle of ever-increasing technology and administrative costs. Partnering with professional BPO companies offering data processing services can help perform data entry work more accurately.
- Data Mining Services – Data mining has helped insurance companies in discovering various useful patterns from customer database. This technique can generate great results and also enhance the decision making capabilities of the insurance company. Experienced data entry companies can provide data mining services and help insurance companies to effectively manage customer data. In fact, outsourcing data mining tasks allows insurance companies to identify risk factors, predict profits, losses and claims apart from providing customer level analysis, sales and marketing analysis, reinsurance, insights on developing new product lines, financial analysis, estimating outstanding claims provision and predicting fraudulent claims. Moreover, outsourcing will support the administrative and management tasks of insurance companies and help them efficiently manage organizational and financial data.
- Underwriting Services – The underwriting process allows insurance companies to determine how much premium should be charged for a particular policy. Insurance underwriters evaluate insurance proposals to determine their feasibility and the amount of risk involved. This enables insurance companies to gain a competitive advantage over their competitors by bringing about process excellence, including catastrophe modeling, renewals and underwriting support. Underwriters may also balance all the losses that insurance companies may incur from probable risk of potential claims. The aspects considered by underwriting include claims experience and credit ratings where lower claims experience or credit rating corresponds to low premiums. Outsourcing helps the insurance sector to cover the full spectrum of underwriting services which ranges from advanced analytics to business process management. Other underwriting services include submission and clearance where documentation on liability coverage, application processing, eligibility checks, account verification and data scrubbing is done. In the case of property data management, outsourcing providers use rating tools and automated underwriting engines, thereby helping the underwriting team to effectively price risk.
Outsourcing helps insurance companies to enjoy other benefits such as improved ease of increasing the operational capacity by documenting workflow and placing the burden of other non-core activities on the outsourcing service provider. This helps improve the efficiency of in-house staff. Business process outsourcing (BPO) can be used to streamline the back end operations effectively, and maximize revenues as well as sales.