An analysis of the benefits of outsourcing claims management to India by insurance companies inevitably leads to the question – why outsource claims management at all. The whole process can be segregated into four basic components that is, evaluation of claims and deciding on eligibility, disbursement, quick adjudication in case of any glitches and finally claims audit that ensures that all laid down procedures and stipulations have been strictly adhered to.
If this is taken in totality, it will be observed that it is a very critical component of the whole insurance business but does not fall into the core activity category. Hence, incurring expenditure to set up the required infrastructure for claims management deviates from the primary insurance objective of devising competitive schemes and policies and selling them. This is one reason why claims management is being increasingly spun off to outsourcing agencies by insurance companies.
The next and most obvious point that has to be considered once the decision to outsource claims management has been taken is this – what is the best offshore destination that will optimize the process of claims management once outsourced. Here it has to be remembered that unlike other back-office functions such as data processing, payroll management, commission management, and other administrative functions, claims management is a very complex issue. Often it requires sifting through records that are more than decades old. Hence a high degree of professional expertise is required on this front.
Taking all these factors into account, India has emerged as the foremost destination for outsourcing claims management. But why is outsourcing claims management to India such an attractive proposition today?
Skilled Manpower – India is a powerhouse of talent so far as human resources are concerned and are one reason why top multinational companies recruit their key personnel from here. Added to this is the fact that there has been a spurt in technological innovations with the result that outsourcing agencies in the country have been able to consistently update their systems to offer higher operating efficiencies. It has borne fruit in terms of quick evaluation of old data, inspection and quick settlement and adjudication of claims.
Low Operating Costs – This is one of the primary reasons why the prospect of claims management being outsourced to India is so appealing. Low operating costs in India stems from the fact that the whole process is carried out by advanced data processing systems thus saving on time. It not only enhances the reputation of insurance companies as they are seen to quickly settle claims, but the saving in costs as against the same process done elsewhere also gives the insurance companies extra margins to devise competitive new launches.
Quick Turnaround Time – Again, it is one of the advantages that India has to offer. Any work pertaining to claims management is done outside the working hours of the parent company due to the difference in time zones. There is, therefore, a smooth seamless flow of work with resultant faster turnaround time.
All these factors have made India one of the top offshore locations for outsourcing claims management.