across the world
Insurance Sector: Outsourcing of Business Activities, Functions and Processes
Outsourcing of business activities really took off in the insurance sector in the mid-1990s when it was felt that to retain its competitive edge, non-core activities and insurance back-office tasks had to be spun off. What initially started off as a mere experiment quickly rook roots in reality when the world faced recession, uncertain times and strict Government regulations and control policies.
Cost-cutting measures had to be initiated and this was only possible if the same work could be parceled off at lower rates by taking advantage of wage differentials between countries. This in a way was responsible for insurance outsourcing services going on the fast track and today it is considered to be an indispensable part of the insurance scenario.
Which business activities, functions, & processes does the insurance industry outsourcing today?
Data and Forms Processing Services
Data processing is very important and requires huge investments in hardware, software, and safeguards to ensure data security. It is estimated that by outsourcing this single activity alone, costs have been brought down by almost 40% without compromising on data entry and processing accuracy.
Forms processing is another task that eats into manpower resources and time. Insurance companies have almost limitless types of forms – application forms, claims forms, medical forms, payroll forms to name just a few. Processing them does not require any special discretionary powers and is a routine, tedious and repetitive activity. By delegating the activity to insurance outsourcing services, the industry is able to focus on the more crucial core activities.
Most insurance outsourcing agencies offer this service as a total and comprehensive claims management package. It starts with the insurance company sending information to the agency on any claims made. The claims administration process is set into motion and the outsourced company evaluates the eligibility of the claim.
A large number of factors such as statutory inclusions and exclusions are accurately taken into account before the final figure is arrived at. It requires a great deal of insurance industry-related knowledge and professional expertise.
Caution has to be exercised during disbursement to ensure that the real claimants as per law get the amount. Insurance outsourcing services ensure that the whole process is put on the fast track and settled at the earliest as the credibility of the insurance sector depends a lot on this aspect.
This is a complex activity and calculations have to be accurate and amounts paid on time, just like salaries. Most outsourced companies have the necessary infrastructure in places such as data processing systems and trained manpower.
Specialized commissions management takes care of the total process made complex by the fact that different policy schemes have different commissions payable and agents sell a wide range of them. Hence no two commission payable is the same. Think of the thousands of agents to be paid every month and the magnitude of the task can be easily understood.
By getting help from the insurance BPO industry, insurance companies can concentrate on the core activities, and make new strategies and products and sell them at competitive rates. The savings from outsourcing can be utilized to offer attractive prices and commissions. You may consider outsourcing insurance back-office operations to Cogneesol – an insurance BPO industry leader, since 2008. Call us at +1 646-688-2821 or email at email@example.com, and open doors for new opportunities.
How Insurance Backoffice Providers Help Insurers Bridge Talent GapRead More
Biggest Legal Profession Challenges in 2022Read More
10 Money-Wasting Business Accounting Mistakes You Must AvoidRead More
Real Estate Accounting – Common Mistakes to AvoidRead More
How Outsourcing Can Upgrade your Insurance Business Virtues?Read More
Insurance BPO: The New Imperative for Insurance CompaniesRead More