Lately, you may have noticed a surge in the insurance domain, with more and more firms looking to safeguard their operations from a multitude of potential threats that seem to be cropping up one after another. No wonder businesses are more bullish on threat mitigation and are willing to recalibrate their risk coverage and disaster management strategy.
But having said that, let’s face it, the insurance sector isn’t exactly a safe haven itself, grappling with global issues that could shake up any industry. From a severe talent crunch to sky-high inflation, the challenges are piling up, adding more stress to businesses hoping to scale and stay profitable. Sounds familiar?
In this mix, insurance business process outsourcing or BPO has been a game-changer, providing an alternative mitigation model for traditional insurance as well as captive companies. You might be asking, “How does that help?” Let’s delve into it, shall we?
Here are some trends that you’ll probably see making headlines in the insurance sector through 2023, and likely beyond:
Profitability roadblocks
Talk about a double-edged sword—rising replacement costs fuelled by inflation are eating into the profits of insurers, even as they cash in on higher premiums due to a tough market.
Opportunities & growth
If you look closely, there's no dearth of growth potential in insurance, especially with emerging markets like small businesses, and niche sectors like green energy.
The talent quest
Attracting and retaining quality talent has become a real nightmare for most insurers, thanks to a major generational shift and a global talent scarcity.
The tech paradigm
It's safe to say that digital enhancements and virtual engagement platforms are no longer just the cherry on the cake. They've become indispensable, especially in a post-pandemic world, where firms relying on outmoded systems are feeling the heat.
Pay attention now because the global insurance BPO market is seeing green lights all the way. According to a market research study published by Facts and Factors, from 2022-2028, and experts believe it's likely to grow at 8.8% and cross the $9.8 billion mark by 2028.
Wondering what all this hullabaloo about BPO is?
BPO is a door for firms to delegate tasks like accounting and other back-office operations to a third-party service provider. For insurance companies, this could mean tapping into a pool of professionals skilled in their sector, without having to bear the costs and time of in-house hiring or setting up regional offices. Sounds like a win-win, wouldn't you say?
You might be surprised to know that a host of services can be outsourced. It could be something as custom and infrequent as drafting policies or overseeing governance processes or as large scale as data migration projects.
The advantages of insurance BPO? There are numerous:
It's all about building relationships. As the outsourcing industry matures, business agreements tend to look more like close partnerships than routine vendor-client relationships. That's a benefit, right there. It's like having someone who can share not only the risk and cost of resources, but also provide access to local infrastructure and technology. Imagine all the avenues this could open up for rapid growth or to balance high employee turnover. Exciting times ahead!
