Before going into the intricacies of outsourcing policy management services, it makes sense to know exactly what policy management is all about. It is actually an administrative plan where efforts are made to predict how a decision or choice will ultimately turn out to be enabling policymakers to take corrective measures to deal with any eventualities related to it. As far as insurance is concerned, policy management can relate to both the front office or back office functions. The extent to which policy management can be put in the hands of insurance outsourcing companies has been a matter of some debate but as it has lately turned out practically every policy management services are being outsourced presently.
An example of insurance support services being a part of policy-based management and how this is usually outsourced will prove this point. If the computing system or data processing policy management is taken into account, parameters that need to be considered are data security and speed of processing. It also involves policy-based network management that will decide on such areas of control as to access to the systems and priorities that need to be allotted for the use of resources.
There are a number of benefits of outsourcing policy management services to insurance outsourcing companies. While it is not related to specific areas, it has been seen that it is back office functions that are mainly outsourced. This is because it offers an opportunity for insurance companies to concentrate on such core activities as policy sales, customer service, and structuring and designing new schemes. Most companies today that is specialists in handling insurance outsourcing services have acquired necessary professional expertise in offering policy management services.
A few advantages of outsourcing insurance policy management can be classified as follows –
Cutting costs and enhancing productivity – This can be primarily related to insurance back office outsourcing as complete sections related to human resource management, accounting, data processing and maintaining its security and commission management is outsourced. This frees up resources of the insurance companies thereby cutting costs and leaving them free to concentrate more on sales and other core activities. All policy management decisions regarding these outsourced functions are taken by the insurance outsourcing companies.
Reducing average handling time of services – Since policy management decisions have been outsourced for a few key activities it becomes the responsibility of the outsourced agencies to predict outcomes of the policies taken by them in these areas instead of the parent insurance company. This results in time savings in taking any necessary corrective action.
Reduced training costs – Insurance outsourcing services will have their own staffs who are experts in the services outsourced to them. Hence insurance companies need not bother about having trained staff for handling these areas.
To outsource policy management services is an integral part of the insurance industry and has helped the insurance sector a lot by taking it forward where it need only focus now on core issues.