WHAT IS BUSINESS PROCESS OUTSOURCING (BPO)?
Insurance outsourcing has continually evolved to meet market needs. In the past, the need was for data entry and call center representatives. Today, there’s growing excitement and momentum surrounding new automation capabilities and the opportunities this will provide for insurance-focused business process outsourcing (BPO). Outsourcing providers are taking different approaches to keep up with these developments.
Before entering any outsourcing partnership, you should be aware of the various types of providers currently in the marketplace and the benefits each can give to you and your customers. Outsourcing providers generally fall into three categories:
- Traditional
- Transactional
- Strategic
WHAT SERVICES DO INSURANCE BPO PROVIDERS OFFER?
Outsourcing providers can support insurance organizations by handling countless tasks across the policy lifecycle, such as:
- The submission-to-issue process
- Policy servicing
- Claims handling
- Renewals
- Accounting
- Quality assurance
By providing dedicated staff to carry out these tasks and processes, outsourcing providers help your teams dedicate more time toward servicing clients and growing the book of business. In addition, leveraging outsourcing can enable you to benefit from insurtech capabilities, like robotic process automation, while avoiding the significant cost of developing and maintaining them.
TRADITIONAL BPO MODEL
Traditional business process outsourcing is when a company delegates certain tasks to the outsource provider. The tasks are then completed in accordance with a defined service level. The main benefit of this type of outsourcing model is wage arbitrage.
Tasks are performed by trained staff, who are generally located offshore where wages are lower and talent is easier to find, though onshore outsourcing can also have cost savings. Insurance providers are then able to execute their processes at a lower rate, saving money without sacrificing quality.
TRANSACTIONAL BPO MODEL
The transactional model is about resolving specific issues, such as bottlenecks in processing. These often occur when a business is growing rapidly and has yet to expand their project management framework, causing a stall or limit in production capacity. Or, and this is especially true for the insurance industry, the backlogs may be due to a talent shortage holding the organization back.
To maximize efficiency and improve workflow, incorporating transactional BPO allows operations to continue without interruption while a baseline solution is implemented. Once the in-house processes have been restructured properly and the business can efficiently absorb the previously outsourced task, the work may be brought back in-house, or the organization may see a benefit for continued outsourcing.
Transactional BPO is ideal for:
- Processing a large influx of claims
- Sorting through backlogged policy checking
- Auditing records for compliance
STRATEGIC BPO OUTSOURCING MODEL
Traditional and transactional models aim to resolve specific issues. Strategic outsourcing takes a holistic approach to managing operations.
Strategic outsourcing incorporates all the elements of an organization:
- Strategy
- People
- Process
- Technology
Aligning all four points improves business processes and outcomes.
By taking a strategic approach to outsourcing and operations, improvements are made to the entire infrastructure, rather than focusing solely on a wage arbitrage play.
ReSource Pro pioneered this strategic approach within the insurance industry. Understanding that the real benefit for organizations didn’t just lie in processing tasks, but in optimizing operations to remain relevant in today’s disruptive and challenging business environment. With this approach, it’s not enough to complete a given process at a lower cost, it’s about improving and standardizing that process so it’s more efficient, accurate, and aligned with organizational objectives.
WHY THE STRATEGIC APPROACH IS MORE EFFECTIVE AND EFFICIENT
Taking a strategic approach to operations helps an organization’s defined strategy align with its operations.
- The right people, with the right skills, are doing the right jobs:Part of maximizing efficiency means auditing how your employees’ skillsets are being utilized. Having the right people doing the right jobs ensures your operations run effectively and can sustain the ebb and flow of business.
- Processes are optimized for accuracy and efficiency:Taking an overall look at how day-to-day operations are working helps to evaluate which areas require change and which areas can be capitalized on for strong performance. Standardized processes eliminate waste and deviation.
- Implementing the necessary tools and technology:A large part of job success depends on having the right tools. Up-to-date technology will ensure your staff is supported and capable of carrying out their duties.
OUTSOURCE. OPTIMIZE. EVOLVE. TRANSFORM.
When insurance organizations take a strategic approach to operations, they open the door to profitable growth. Business objectives and goals aligned with operations can be achieved more easily; staff can focus on higher-value work; processes are more accurate and efficient, reducing or even eliminating non-compliance exposure while improving service levels; and sales teams can capture more opportunities.
Find out how you can implement outsourcing models within your business to improve efficiency, profitability, and employee retention. Contact ReSource Pro to learn more.