Tom Peters aptly quoted “Do what you do best, outsource the rest”. Outsourcing is meant as a delegation of non-core operations or jobs from internal production within the business to an external entity that specializes in that operation. Business Process Outsourcing is a process which is undertaken by a company in order to focus on the core business competencies. The common processes which are generally outsourced include: Call Centers, Data Processing, Accounting and Payroll Outsourcing.
Insurance companies have traditionally been among the slowest adopters of outsourcing/offshoring. However, in the recent years, higher claims disbursement, shrinking margins, and increasing competition have forced insurance companies to look at outsourcing as a measure to improve efficiency and to channelize resources towards the core functions of product development and innovation. Recently, insurance companies have come to recognize that their core competencies which are underwriting, financial analysis, cash management, risk management and portfolio analysis need more focus than the areas like general accounting, payroll processing, customer support, human resources etc. Some of the key factors which have attracted insurance companies to outsource their areas are:-
Enhanced Job Acceleration: – Insurance back -office companies are filled with experienced manpower which helps to increased productivity. Further, due to immense competition in the market, they offer the best possible results resulting in the increased work performance.
Developing new competencies and skillset:- Insurance outsourcing companies make it easier for the insurance firms to enhance business, exploit leads, empowering skillset & help firms to enter into a new competency market.
Time Zone Advantage & Cost Effective Labor:- The cost-effective labor coupled with time zone advantage of India gives companies in western countries as an added advantage as before the US case managers come to the office, the reports are already to be worked on before their working hours.
Speedy Productivity: – Since, the insurance outsourced company handles the back- office operations work, we don’t have any disturbances of taking the calls and following up with the clients. The outsourced company sole work is to provide tailor-made services and handle it efficiently.
Beat Competition: – Companies outsource to stay ahead of the competition rather than to downsize because it helps them to gain market share and to grow. Outsourcing data entry services helps the company to make the most of productive time as the agency costs are minimized and the resources are used diligently.