Insurance Services Outsourcing has a number of benefits including improvements in the services provided by the insurance companies, cost curtailment and the most important – significant reduction in the fraudulent practices associated with insurance. However, most people are still unaware of this advantage of Insurance Services Outsourcing, and so, fail to grasp the pros of the practice in its entirety. Let us now discuss and analyze some of the reasons why insurance services – outsourcing reduces the insurance – related cheating and fraud cases.
Higher Efficiency Level and Alertness
More and more insurance companies and Third Party Administrators or TPA’s are resorting to outsourcing of the insurance services due to the greater degree of alertness of such BPO’s, as far as the security issue is concerned. The outsourcing firms, being totally dependent on their reputation regarding quality of services provided to grasp more and more of the market share, are religiously sincere about security and thoroughly alert on avoiding any fraudulent practices, as even one such instance may affect business negatively. Additional cautiousness is thus, the key to the success of the outsourcing firms, and so they stick to security policies with a strict discipline. Making use of a number of modern technologies in detecting frauds, the outsourcing firms have been able to reduce the risks related to insurance frauds to a great extent. There are a number of automatic fraud detecting systems and state-of-the-art technologies for security systems installed today by most of the outsourcing firms to detect and prevent fraudulent practice.
Reduction in Information Leaking
It has been observed over the years that frauds and cheating cases related to insurance companies have always had an insider, someone within or very close to the insurance company, who leaks vital information and secret documents, making it easy for the perpetrators to commit insurance frauds. Processes like insurance assessment and settlement, which are highly classified and should, under no circumstances be divulged to the clients or any other outsiders, are often disclosed, leading to the incidence of fraudulent cases. This has so far been possible as the internal office work of the insurance companies and TPAs used to be done in a local office located in the home country, with a workforce that had greater access to all the necessary information required to help in the fraud.
In case of insurance services outsourcing, however, this opportunity of seeking inside help to commit a fraud is reduced significantly. Most of the outsourcing firms are located thousands of miles away from the insurance companies, operating with a workforce, of which all the members are not made aware of the most classified information. Moreover, there is also the great geographical distance to reckon with, between the home country and the outsourcing firms, not to mention the language barrier. All these make the planning process and the execution part of insurance frauds so very complicated and risky, that the incidence of fraudulent practices is automatically reduced to a considerable extent.
The insurance companies and the TPAs are now been able to operate with solace as the outsourcing firms have led to a significant decline in the number of insurance related fraud cases.