Outsourcing is the magic mantra in today’s business scenario and nowhere is it more relevant than the insurance sector. The reasons behind this are not too difficult to fathom. The total insurance business is a vast mix of various functions with most being supportive services propping up the core activities. The primary activities of this sector are devising new schemes with competitive pricing and strategies to increase market share. Other than these, all can be clubbed into back-office functions – administrative and payroll management, commission management, claims management, data entry and processing, and even policy management which help give direction to the outsourced company on operational modalities.
Two questions crop up in this context – why should you opt to outsource a big part of the insurance process. And if you do, what are the factors that are to be considered for choosing the right insurance outsourcing company to maximize ROI.
Why Should You Opt to Outsource a Big Part of the Insurance Process
Answers to the first question are not difficult to find out. By outsourcing standardized, non-discretionary tasks, you gain time to concentrate on core activities. Skilled personnel avoid diverting focus to technical tasks like data entry and processing. Instead, they can contribute more effectively by creating innovative strategies and launching new products, establishing competitive pricing, and promoting them.
Furthermore, this approach generates significant cost savings by eliminating the need to establish an extensive infrastructure network to support these functions and preventing growth challenges in the insurance business.
Factors To Choose the Right Insurance Outsourcing Company to Maximize ROI
The second question, which involves considering the aspects before selecting the right insurance outsourcing company to maximize ROI, becomes more complex and requires finalizing after thorough deliberation. However, they can be broadly classified under three factors –
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Check the Business goals and objectives
Treat the functions outsourced to an external company as an extended arm of the parent company, necessitating alignment in business goals, objectives, and working philosophies. The outsourcing agency might have the required infrastructure and systems to cater to the needs of the insurance industry. Yet, without a mutual understanding and clear communication regarding the optimal task approach, the outsourcing won’t optimize or yield expected outcomes.
Check out whether the policies of the agency are insurance-centric and whether they truly understand the exclusive needs of the sector. Before signing any contract, have a formal discussion with these executives and put all your cards on the table.
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Check for track records and experience in the insurance sector
Insurance outsourcing per sector cannot be compartmentalized. For an outsourcing company to stay economically viable, it must serve diverse sectors and industries. These might be IT, ITES or BPO services too. Hence it is essential that you evaluate their credentials and check their experience in the insurance outsourcing business. Verify the number of years of experience that they have in dealing with the insurance sector. A sure of knowing this is to ask for and evaluate their past and running projects related to insurance. Compulsorily assess whether those are on the scale of what you will be outsourcing.
Most crucially, ask for proof of the security measures that they have in place. You’ll be outsourcing a lot of data entry and processing work so ensuring their safety is critical to you and your policyholders. Knowing that the insurance outsourcing services provider has the required infrastructure in place is having half the work done.
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Check the credentials & financial standing of the insurance outsourcing company
With a financially strong and stable company, you can safely enter into a long term contract. Such a company will be investing at periodical intervals to strengthen and update existing systems and infrastructure. You’ll greatly benefit from it in terms of speed and accuracy of services delivered to you. However, it is not enough to check merely the fiscal stability of the company, check for credibility and market reputation of the owners and promoters. This usually rubs off on their company.
Bottom Line
These are the factors that will help you in choosing the right outsourcing company for your insurance business which you can broadly rely on for better ROI. Ultimately a lot will depend on your gut feeling in the matter before signing a contract.
