Challenges with Adoption of Insurance Outsourcing and Their Solutions

Last updated: 29 Feb, 2024 By | 6 Minutes Read

Challenges with Adoption of Insurance Outsourcing

With the ever-changing regulations, growing customer demand, changes in customer behavior, and market dynamics, the insurance business is becoming complicated, especially in today’s dynamic business environment. The hyper-competitiveness in the insurance industry regularly gives rise to several challenges that make insurance companies go through difficulties managing the overall business and processes. One of the common problems is finding the right staff; sometimes, it is difficult to find the required talent, while, at times, hiring skilled people is costly. Explore insurance outsourcing solutions for tackling these issues.

Many challenges are initially involved in recruitment; however, even when you get quality staff on board, you may face other issues such as shortage of capital for training and development, arranging office space, furniture, computer systems, stationery, equipment, etc. for the new staff.

Insurance outsourcing can be a better response to almost all challenges you come across while taking your insurance business toward success.


Outsourcing – A Strategic Option

In the past decade, the insurance sector has realized how advantageous it can be to include outsourcing in the process management models. Moreover, outsourcing will be more prevalent in the coming years; the BPO market size is likely to reach $405.6 billion by 2027.

Many businesses have benefited from outsourcing and dramatically transformed their operations and service offerings, achieving higher customer satisfaction levels. Insurance companies and agencies already having skilled and experienced employees can enjoy augmented productivity and enhanced profitability by transferring repetitive back-office jobs to a trusted outsourcing partner. This enables in-house employees focus more on enhancing their expertise in managing more crucial processes and deliver higher value outcomes.

For insurers seeking growth and profitability, outsourcing some processes can be a better strategic option in the long run. Outsourcing helps maximize operational efficiency, overall productivity, reduce overhead, and manage market/economic uncertainties. It indeed acts as a solid foundation for growth and expansion.

Almost all insurance operations can be outsourced; however, some of the commonly outsourced processes are claims administration, policy management, commissions management, and customer help desk.

While outsourcing brings various advantages to your insurance company or agency, it is usually not easy to decide whether you need to outsource or not. Sometimes, it isn’t easy to choose a reliable insurance BPO partner.

Here are some challenges you might face regarding outsourcing, along with their insurance outsourcing solutions.

1. The Employees’ Fear of Replacement

When you plan to work with a BPO partner and discuss the same in your company, your team might worry; they might feel insecure about their job or think that outsourcing can compromise service quality, leading to disappointed clients.

Solution  Encourage Your Employees

You need to remind your staff that today’s insurance process outsourcing service providers are completely different from traditional ones. Your team can extend capabilities by outsourcing some tedious processes to a dedicated partner, streamlining operational workflow. This will impact your team’s daily routine, allowing them more time to focus on insurance sales, servicing major clients, and strategically taking your business to new heights.

2. Process Integration Difficulties

Before closing the deal with a partner, you want to ensure that your customers won’t face service disruption issues due to workflow interruption. It is difficult but vital to audit your internal processes, determine where you lack efficiency, and identify areas where you need help from an insurance outsourcing firm.

Solution  Choose a Reliable Partner

Choosing an experienced and reliable insurance BPO partner will collaborate with your operations team, ensuring a smooth transition. Whether you will outsource some jobs or the entire process, the integration will not cause additional service delivery issues. In fact, some outsourcing firms have specialized teams who handle your work according to your unique needs.

3. Higher Costs are Involved in Outsourcing – The Myth

It is crucial to spend each dollar wisely for the betterment of your insurance business. Policy changes, cancellations, and claims payouts can cost you a lot. Moreover, you might come across companies charging high service costs.

Solution – Find a Good Firm offering Affordable Services

If you search and research a little more, you will be able to find companies providing outsourcing services at costs that seem reasonable. Apart from that, many firms offer suitable pricing models; for instance, you can acquire their services on a contract basis (project-based) or hourly basis. This way, you will only pay for the work done for your insurance company.

What’s more?

  • You can free up your internal resources and shift them to other important work that generates direct revenue.
  • You can minimize billable hours spent on time-consuming administrative processes, making the best out of your investment.

4. Difficulty in Maintaining Company Culture and Service Quality

Shifting responsibilities to an external partner can be challenging when you know it can disrupt the company culture that you have been cultivating by encouraging collaboration across your in-house teams.

Solution – Know Your Partner Well before Closing the Deal

Before you finalize the firm you will outsource your insurance processes to, you need to ask them specific questions to get a clear picture of how they can help you maintain service quality and working culture you are following for years. A professional outsourcing firm will take some time to comprehend your company culture, what you expect from them through services, and operational guidelines that they must follow, etc. Besides, they can provide you flexible, sustainable solutions that you can scale up according to your needs at different times.


With numerous advantages that insurance outsourcing services provider, insurance companies and agencies can reduce operational expenditure, get more time and energy to focus on business growth, and have office staff for crucial business segments such as marketing and sales. They can perform vital insurance functions efficiently and bring higher profitability and growth rates with outsourced insurance processes.

At Insurance Support World, we have a dedicated team of qualified, skilled, and experienced insurance professionals to enhance operational efficiency and productivity, further helping you maximize your company’s overall potential. We are in the outsourcing business since 2008, providing round-the-clock support to insurance companies and agencies and successfully satisfying hundreds of clients worldwide. Let us help your insurance business grow while you can focus on bringing in new business and customer retention.

Know more about our insurance outsourcing solutions; call us at +1 646-688-2821 or email at i[email protected] to get a free trial.

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