If you are part of the insurance sector, you know how much you must focus on meticulous attention to detail. And I’m sure you must have felt overwhelmed and frustrated by the burden of back-office paperwork and operational intricacies at some point in your work life. The administrative demands of the industry can divert your valuable time and resources away from your core mission, which is to serve your clients efficiently.
Have you considered outsourcing your back office activities to a service provider? Maybe you have, but you are unsure of the benefits you can reap. If that’s the case, I am here to shed some light on the benefits of outsourcing your back-end processes so you can make an informed decision.
As you must be aware, business process outsourcing for insurance falls under the umbrella of banking, financial services, and insurance (BFSI), and the market has witnessed substantial growth in recent years.
According to a report by Reportlinker.com, the insurance BPO service industry is expected to grow substantially between 2023 and 2028 at a CAGR of 5.4%. This growth is largely owed to the increasing digital adoption to manage business operations in the sector. So, let’s talk about some of the benefits you can expect from outsourcing your back-office activities to a service provider.
Better Fraud Detection and Investigation
Cases of insurance fraud are constantly increasing in the US. According to an article published by Forbes, the percentage of fraudulent claims filed in 2022 was almost 20% in the country. The article mentions that insurance fraud amounts to a loss of US $308.6 billion each year. However, you can decrease your losses to insurance fraud by partnering with an outsourcing service agency.
Service providers use the latest software solutions to investigate claims and detect any fraudulent activities. Outsourcing partners can scrutinize insurance claims through AI-powered predictive analysis of historical data and identify irregularities for red flags in claims. The data can include the claimant’s history, unusual billing patterns, and inconsistencies in the accident damages reported.
Outsourcing service providers may be able to use AI-based voice and speech-analyzing software to judge the authenticity of any recorded statements made during the claims process. The tools can detect signs of deception by analyzing vocal characteristics and speech patterns. If the software detects inconsistencies or evasiveness in the claimant’s statement, it will trigger a closer investigation of the claim.
Service providers perform a comprehensive background check on the claimant, which includes identity verification, criminal records, and financial history. They also conduct network analysis to discover connections between multiple claims, policyholders, and insurance providers to detect the chances of organized fraud schemes.
Some outsourcing partners even monitor a claimant’s activities on social media platforms to gather information. It can help in identifying discrepancies between reported injuries or damages and actual behavior online. Service providers can also use geospatial data to verify the accuracy of insurance claims. For example, if a claim reports an accident in an area without any history of an accident, it can signal further investigation into the incident.
Service providers can also assist your special investigation units by providing critical information or evidence. They often compile detailed reports by conducting surveillance and coordinating with law enforcement agencies whenever necessary. Outsourcing partners will always ensure that fraud investigations adhere to the laws and regulations of the industry to avoid any legal complications while investigating fraudulent claims.
Scaling Operations
Business outsourcing service providers specializing in the insurance sector can implement an array of digital tools like chatbots or online support portals for your back office activities. These tools can enhance customer experience and handle larger volumes of customer inquiries, allowing you to scale your operations without significantly increasing staffing costs.
According to Virtual Insurance Pro, hiring an insurance agency back office outsourcing provider allows insurance businesses to realign their internal workflow. Key position holders can focus on the growth of the company instead of focusing on non-revenue activities.
Advanced automation tools, including Robotic Process Automation (RPA) and machine learning, can take care of scaling routine tasks with minimal manual intervention. Underwriting professionals employed by service providers use these tools to support insurance companies during periods of high demand. They can review applications, risk assessments, and policy evaluations for you so you can maintain a quick turnaround time when facing an increase in workload.
Analyzing vast amounts of data is a crucial part of scaling up your company since you’ll be generating a lot of information from customer interactions, claim filings, and market trends. You can benefit from the service provider’s expertise and advanced software systems to analyze this influx of data and gather valuable insights to make informed decisions.
An insurance agency back office outsourcing provider can help you take advantage of their ability to interact with customers from various parts of the world so you can scale your operations globally. Your outsourcing partner can handle customer interactions and administrative tasks in various languages while ensuring seamless communication. You can also benefit from their expertise to navigate the complex regulatory landscapes and meet the industry standards of different countries.
Upscaling operations often involve updating or migrating legacy systems to modern platforms. You can take advantage of your outsourcing partner’s expertise in technology to achieve these seamlessly and efficiently. They can help you integrate new systems and migrate all the data to ensure a smooth transition.
Cost Savings
The insurance industry has become fiercely competitive to provide the best possible prices to its clients. That is why saving costs can significantly impact your company’s profitability and your ability to provide competitive prices to your clients. Outsourcing your back-office activities to a service provider can help you achieve substantial cost reductions, eventually improving your bottom line.
You can outsource your non-core administrative tasks, such as data entry, policy processing, and claims management, to significantly reduce overhead costs. Outsourcing these jobs to a service provider means you do not have to maintain a team of in-house administrative staff.
Outsourcing partners use the latest AI-powered software systems, which means you do not have to invest thousands of dollars to purchase them. The service provider also pays for the infrastructure and its maintenance to run those software systems, which means you can benefit from all of this without paying a cent. I’m sure you’ll agree that this is a huge saving in terms of business investments.
Providers also provide specialized services and ensure that the tasks are completed accurately at their end. That means you do not have to worry about loss of man-hours or refunds to clients if there are any errors. You will have access to the global talent pool of skilled professionals through your outsourcing partner, contributing to your cost savings.
Final Thoughts
I hope I’ve been able to highlight some of the salient benefits of outsourcing your back-office activities to a specialized service provider. Insurance companies that embrace back-office outsourcing are better positioned to navigate change, meet evolving client expectations, and seize emerging opportunities.
The future of insurance hinges on this strategic evolution, where client-centricity and operational excellence go hand in hand, ensuring the industry’s enduring relevance and success. When you strategically partner with an outsourcing provider, you will also achieve improved customer service and business continuity standards. You can gain a competitive advantage and renew your focus on core business activities.
