The global insurance BPO market was valued at $7.9 billion in 2022 and is projected to reach $24.6 billion by 2032, growing at a CAGR of 12.3% from 2023 to 2032. —- Allied Market Research
Strongly suggesting that the insurance BPO industry is expected to witness robust expansion over the next decade, this expected growth rate signifies the opportunities available in the sector, attracting investments and indicating strong market demand. It also implies that insurance companies increasingly recognize the benefits of outsourcing core and non-core processes to specialized service providers. Outsourcing insurance policy management forms part of such deals.
What is insurance policy management? Why is it important?
Insurance policy management is the process of managing insurance policies by insurance companies. This involves policy issuance, policy updates, premium collection, claims processing, policy renewals, and policy documentation.
It is important for:
- Efficient policy administration with respect to accurate recording of policy details, managing policy documents, and handling policy-related transactions thereby reducing errors, and providing timely services to policyholders
- Policy compliances with regulatory requirements and internal guidelines
- Enhancing customer service and satisfaction though timely policy issuance, prompt response to queries, and efficient claims processing
- Proper risk assessments and underwriting using the accurate policy data and information to assess risk levels, determine premiums, and make informed underwriting decisions
- Accurately assessing and processing claims using the policy details, coverage information, and policyholder data thereby facilitating faster and more accurate claims processing, improving overall efficiency and customer satisfaction
What are the major challenges of insurance policy management in-house by insurance companies?
Managing insurance policies in-house often result in the following challenges:
Difficulties in achieving cost optimization and scalability – Establishing and maintaining in-house policy management capabilities require investments in personnel, technology infrastructure, software licenses, training, and ongoing system maintenance on one hand, and also slows down expansion avenues on the other
Problems of data management – Insurance policy management involves handling large volumes of data, including policyholder information, policy details, endorsements, claims data etc. Ensuring accurate data entry, data integrity, and data security with such voluminous and variegated data can be complex and time-consuming
Complexities with respect to operations – Insurance policies can have complex structures, coverages, endorsements, and exclusions. Managing the intricacies of policy administration, including policy issuance, renewals, updates, and endorsements, requires skilled personnel and robust systems that can be difficult to have under one roof
Adherence to regulatory requirements – Considering the numerous legal and regulatory requirements that insurance policies are subjected to and also their jurisdictional variations, in-house insurance teams are often found to grapple with staying updated with evolving regulations and ensuring policy compliances
Keeping pace with technology – In today’s hi-tech world, policy management is effective only when it is driven by advanced technology systems and infrastructure. However, maintaining latest policy management software, data storage capabilities, and security measures to handle policy-related data require huge capital investments
Managing customer requirements – It may be daunting for insurance companies to manage policyholders’ expectations of timely policy issuance, easy access to policy information, responsive customer support, and efficient claims processing in-house
Also Read: How Modern Insurance Policy Administration Systems are Changing the Insurance Industry?
Why to outsource insurance policy management services?
Outsourcing insurance policy management services functions to specialized third-party service providers help overcome the afore-mentioned challenges, reduce operational burdens, ensure compliance, enhance efficiency, and allow insurers to focus on their core competencies.
Consider Insurance Support World’s policy management services for one of the largest and fastest-growing commercial insurance agencies in the U.S.A.
Our team helped the achieve over 99.95% accuracy (up from 87%), save 4 hours per day per Account Manager, and brought about 17% increase in sales by:
- Optimizing the email dispatch process with established templates, saving time and effort
- Streamlined proof generation with our institutionalized PDF templates, eliminating manual formatting and boosting productivity
- Handled real-time change requests resulting in enhanced customer experience
- Offered a 12-hour shift window, covering coast-to-coast locations in the U.S.A, ensuring swift responses and heightened customer satisfaction
Read in details — Automated Policy Admin for Insurance Agency: Case Study
Overcoming concerns and mitigating risks
Outsourcing insurance policy management services is often wrought in fears of control loss, compromised quality, confidentiality risks, employee morale etc. These are misconceptions. They can be easily overcome by establishing clear expectations and maintaining control through effective communication and performance monitoring. Thorough due diligence is essential when selecting a reputable outsourcing partner with robust security measures. It’s also important to implement communication protocols and provide cultural training. Promoting cross-cultural awareness is another key factor in establishing a strong outsourcing relationship.
In conclusion
Going back to the statistics shared at the beginning of this article, insurance companies around the globe, understand the many benefits of insurance BPO services in today’s highly volatile and competitive world. The benefits go beyond mere cost savings and efficiency increase. Outsourcing brings access to specialized skills, advanced tech allowing swifter strategic decisions. Like other processes, outsourcing policy management enables insurers to focus on core business activities. They can leverage the experience and scalability of the outsourcing partner. With effective communication, clear performance metrics, and regular monitoring, outsourcing policy management services can deliver significant value to insurance companies. It enables streamlined operations and ensures transparency in performance. Regular monitoring helps identify areas for improvement and ensures optimal service delivery.
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