6 Advantages of Insurance Support Outsourcing

Insurance support outsourcing

Offshore staffing solutions providers connect global insurance organizations with insurance professionals at all skill levels. Insurance support tasks are especially suited to outsourcing because they tend to be routine, non-core activities that can be better performed by experts. Insurance support outsourcing yields numerous advantages for companies that establish these types of partnerships.

Table of Contents:

Below are some advantages of outsourced insurance support:

1. Insurance support outsourcing improves efficiency through economies of scale.

Insurance support providers are more likely to have cost-effective workflows and systems for doing routine tasks because this is their core business. The cost of support services, infrastructure, and technology is spread across multiple clients instead of being passed on to individual customers. This leads to saving more costs. By working with a service provider, many insurance support outsourcing providers are able to improve efficiency through economies of scale.

However, there’s always a risk that policyholders, internal staff, and customers will be negatively affected by the implementation of cost reduction measures, whether through outsourcing or other means. Insurers understand that transferring responsibility for certain functions to a third party can inconvenience personnel and clients. Companies need to plan and implement changes carefully so that they can ensure that the outsourcing project is a positive experience for all parties.

Because each insurance provider is unique, a customized insurance support solution that targets cost reduction is ideal. For some firms, offshoring tasks like customer support and document/claims processing are the perfect solutions. Others may prefer to work with a local or near-shore vendor that provides better continuity in terms of staffing, communication, and oversight.

2. Insurance support outsourcing improves market operations.

Sourcefit Philippines Outsourcing Blog: Advantages of Insurance Support Offshore Outsourcing

Customer loyalty is in constant decline as insurance providers are frequently offering new products. In this highly competitive and price-driven environment, top-performing insurers are the first to market their products. They use data analytics to install new products quickly and to establish competitive prices that will therefore improve sales.

This level of performance requires state-of-the-art systems that allow the development and testing of multiple functions. Insurance support outsourcing providers have a wide array of resources that enable them to build agile, integrated, and feature-rich systems that can help you improve the marketing operations of your insurance company. This can drive sales and therefore impact your profitability.

In the U.S., the National Association of Insurance Commissioners (NAIC) launched initiatives to reduce the regulatory review timeframe. In addition, it aims to unify regulatory review processes and regulations across all states. This means that filing requirements and methods of communication with regulatory agencies are more dynamic than ever. They encourage insurers to invest in tools that ensure their forms are compliant upon submission.

However, the filing process is changing from paper-based to electronic systems, and many firms are struggling with this transition. Third parties can help insurers develop and maintain both old and new systems during this critical time.

3. Insurance support outsourcing improves revenues.

In a fiercely competitive market, insurers are outsourcing to improve their services. Many firms struggle with dropping collections and debt recoveries while facing pressure to improve their customer service. Outsourcing providers implement innovative tools and train insurance specialists/customer service agents to manage collections and dispute management operations while boosting customer satisfaction. This helps agents improve collections and reduce claims’ life cycles.

On that same token, the business process transformation that comes with outsourcing can eliminate system inefficiencies. A vendor specializing in a particular insurance vertical can identify overlooked opportunities or risk areas and address revenue leakages to improve profitability.

For instance, by introducing new initiatives and re-engineering delivery teams for an European insurance firm, an insurance support outsourcing provider was able to increase daily collections by 30 percent within the first year. They also reduced claims settlement time by 40 percent, which consequently led to higher customer satisfaction. Claims tagged for litigation were also sent to the legal department within two days, which further reduced the claims lifecycle.  Finally, they generated an additional 5 percent of the business.

4. Insurance support outsourcing provides cost-effective support for expanding companies.

Insurance Support Offshore Outsourcing Benefit: Cost-Effective Support

Expanding companies that attain blocks of businesses also acquire administrative platforms that can be difficult to integrate with their existing systems. Many of these are outdated platforms that are slow, inefficient and often cost more to maintain than to upgrade. Whenever a new block or product is added to a legacy system, it creates another interface and thus another layer of expense.

It’s notoriously difficult to implement enterprise-wide changes and create ready-to-sell products within this dense technological sprawl. In addition, legacy platforms are risk-prone and incompatible with modern technical skills. Customers demand real-time solutions, and agents must be able to pull files in seconds, not minutes.

System integration is time-consuming and labor-intensive whether done in-house or outsourced. However, performing integration in-house can be very expensive and has the added disadvantage of potentially distracting internal staff from core activities. An insurance support provider can help growing companies and insurers transition effectively in the midst of mergers or acquisitions.

Insurance service providers also have the experience and technology to reduce processing costs for newly acquired blocks built on legacy systems. Without sacrificing service quality, they can further drive costs down when the client outsources more blocks of business. In fact, clients can expect an improvement in service levels because changes are engineered into upgraded systems and agents tend to use better tools.

5. Insurance support outsourcing provides access to better resources.

Although policy filing is a highly-specialized function that requires skilled and timely handling, a typical insurance firm devotes less than one percent of its workforce to filing forms and rates. In addition, filing volume can be unpredictable, with many periods of little or no work as well as peak periods when new filings and approvals/objections pile up. This makes the filing process ideal for outsourcing.

Insurance support specialists are more likely to have the manpower and technology to properly complete each task successfully. For instance, instead of having one person do both initial filings and notification of approvals, these separate tasks can be delegated to different individuals. So when a worker is unavailable due to illness or vacation, the external firm can quickly provide a replacement.

A larger workforce also allows the service provider to review work before it is filed. This avoids redundancies and errors that may delay the process. Insurers can also scale their workforce easily depending on need without the financial and emotional issues associated with hiring and firing internal employees.

6. Insurance support outsourcing can improve customer service.

Insurance support providers can improve customer satisfaction and engagement by expanding distribution and customer service capabilities. The modern insurance customer connects and engages with providers through multiple channels. Companies that interact with their clients through a single connection point risk being left behind. Offering other modes of communication improves competition for profitable customers and prospects while improving client access.

Today’s insurance customers are also more savvy and demanding. They seek real-time support, instant delivery and price transparency. They also use price aggregators to move quickly from information gathering to purchase.

To address these challenges, insurers are working with outsourcing companies to add more channels/distribution outlets. They also help develop capacities that meet full customer service needs. Top insurance support providers go further by optimizing the channel mix and integrating data analytics tools with CRM software. These sophisticated data analytics provide deep insights into customer preferences. Data analytics also helps insurers tailor products to customers and enables brokers to identify and convert high-value prospects.

To learn more about outsourcing, you can read our Top 8 Qualities of an Outsourcing Company in the Philippines article. We invite you to follow us on social media and to visit our website to learn more about our services.

banner-finalAbout Us: Sourcefit is a widely recognized US-managed business process outsourcing company based in Manila, Philippines. We proudly serve over 100 clients with a workforce of more than 1,300 employees. Our global centers can serve multiple markets, and our staff is highly proficient in English, Spanish, French, and Portuguese. Whether you need a few or many employees, we can help you achieve your business goals and build high-quality offshore teams.

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We recently received the Fortress Cyber Security Award from the Business Intelligence Group. Sourcefit was also honored with the prestigious recognition of Best Outsourcing Solutions Provider in the Philippines during the 2023 Business Excellence Awards.

Other awards include: FT ranking of 500 high-growth Asia-Pacific, The Marketing Excellence Awards, Inquirer Growth ChampionHR Asia Awards, among others.

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