In relative terms, the insurance process outsourcing industry has always lagged behind other dominant players such as the call center services outsourcing industry and the telemarketing services outsourcing industry. However, if recent trends are any indication, it appears that the insurance process outsourcing industry is fast catching up and is set to outwit many of its contemporaries in the near future.

The D-day may come a lot sooner than expected because the insurance process outsourcing industry has already achieved the distinction of being the fastest growing outsourcing sector, commanding an CAGR of approximately 32.9%. Critics may argue that 90% percent of that growth is coming from onshore outsourcing and only 10% from offshore, but we can overlook that because what it really indicates is that there is plenty of scope for offshoring. The current 9 to 1 ratio is fast changing in favor of offshore insurance process outsourcing and it’s just a matter of time before the inevitable happens.

Expected to generate revenues worth a staggering $25 billion globally by the next financial year, the insurance process outsourcing industry is all set to become a leading player in the worldwide outsourcing market. However, for offshoring to grab a larger share of this pie, it will have to overcome some formidable challenges such as those brought about by cultural barriers, legal compliance issues, risk management etc. In the insurance sector, the majority of clients and customers still prefer onshore relationships and that’s something offshore insurance process outsourcing firms will have to work on if they are to sustain their existing double-digit growth rate.

However, there need not be any doubts about the competence of the offshore insurance process outsourcing industry because it is responding quite well to a constantly evolving business environment. Most offshore insurance process outsourcing firms now show increased involvement in critical issues such as infrastructure modernization, cross-culture training, process value additions, data security and many others.

All these efforts are helping build a better brand image and allowing offshore insurance process outsourcing firms to create a level playing field wherein they can compete successfully with onshore outsourcing firms. It would not be wrong to assume then that the offshore insurance process outsourcing industry will soon be able to add even more interesting chapters to its double-digit growth and success story.

Well, the primary reason is that health insurance carriers and TPAs (Third Party Administrators) that usually manage the insurance claims processing function are having to work in a tougher regulatory environment, which is increasing their operational costs. Adding to the woes are rising crude prices and that is why more and more health insurance carriers and TPAs are choosing health insurance claims processing outsourcing.

Health insurance claims processing outsourcing is now the preferred choice because it allows health insurance carriers and TPAs to achieve targeted goals such as cost savings, efficiency improvements and enhanced accuracy levels. Costs are reduced since most health insurance claims processing outsourcing operations are carried out from developing countries where costs are relatively less. Achieving desired improvements in efficiency and accuracy is also not a problem in health insurance claims processing outsourcing since developing countries now have all the desirables such as up-to-date infrastructure, advanced IT systems and tools and highly qualified and trained human resources.

All of this works in favor of health insurance carriers and TPAs because it allows them to improve customer satisfaction levels without having to pay a heavy price for it. Moreover, since outsourcing firms keep themselves constantly updated about changing regulatory compliance norms, it allows insurance carriers and TPAs to concentrate on other important tasks such as increasing premium collections and expanding customer base. It is not surprising then to learn that demand for health insurance claims processing outsourcing has increased dramatically in recent years.

Well, there are plenty of factors currently fueling the growth of the outsourcing industry. However, if we were to identify the most prominent reasons, the list would include cost-effectiveness, quality, and of course the accuracy, reliability and efficiency of offered services. For a better understanding, here’s some other relevant information on the topic.

For growth, industries such as the offshore outsourcing industry are required to add more clients every year. Offering cost-effective services helps towards this end because each and every business entity today wants to reduce operational costs. This very basic business need prompts businesses to choose outsourcing services that are a proven method for reducing operational costs. The outsourcing industry always relies on this basic business need and this is why it continues to grow even today.

Maintaining high-quality levels in offered outsourcing services also helps because it allows the industry to create the desired goodwill, name and reputation for itself and the offered services. This automatically generates plenty of word-of-mouth publicity and referrals, which together helps in attracting more and more clients, every year.

Offering accuracy, reliability and efficiency while rendering outsourcing services has also helped the outsourcing industry, because these have become the trademarks of the industry. These have helped the industry to create a unique brand name for itself, which signifies the best that one can get from outsourcing non-core business processes.

In the future also, it is anticipated that the industry will continue to grow, because in the future there will be greater demand for outsourcing. As such, there does not seem to be many obstacles to the growth of the business process outsourcing services industry in the coming years.

Just like the inherent difference in the socio-economic and political blueprints of various countries, business domains too have their own specific characteristics and in that context, the business process outsourcing domain is certainly not an exception. While democracy, as a concept, may have witnessed a downward trend in recent years, business domains such as outsourcing are virtually moving ahead in the opposite direction, and that too at a fast pace. It’s probably because of the basic nature of outsourcing, but that is irrelevant because what really matters is that anything that is based on and follows a democratic setup acts as a guiding light for those who wish to realize the benefits of democracy.

The outsourcing domain is helping promote the basic tenets of democracy in its own small way by forging both formal and informal relations with worldwide economies. One of the reasons may be to promote business interests, but that can be ignored because what is also true is that in the outsourcing domain, it’s quite rare that involved parties differentiate between race, religion, creed or sex. Every individual and every business in this domain is given an equal opportunity to contribute their best and be rewarded for it. It is not surprising then to learn the fact that globally, business process outsourcing has become a $149 Billion industry in a very short time.

Outsourcing has succeeded where political negotiations have failed because it creates a win-win for both the originating country that creates the demand and the terminating countries that fulfill those demands through outsourcing services. Whatever be the existing political setup, the benefits of having and working in a democratic setup become quite clear to those associated with it and although not everyone might feel convinced, it does help in its own small way. Outsourcing leads to economic empowerment and combined with its democratic style, it is helping promote democracy even while generating cost savings and improving business processes.

There was a time when it was often ignored, assuming that it was just the paranoia of some hyperactive doomsday aficionados. However with crude oil prices touching $139 a barrel and anticipated to climb even further, the time has come for economies and businesses worldwide to face reality and come to terms with changing trends. Doomsday may still be far away, but if you feel that your business is getting affected due to the recent spurt in oil prices, it would be better if you start thinking seriously about available options such as business process outsourcing. The immediate affect of oil price instability is a dramatic increase in operating costs and since offshore outsourcing is a proven method for reducing operational costs, it is presently the most effective prescription that you can use for your business.

It is true that oil price hikes are having an adverse affect on the economies of developing countries that do most of the outsourced work. However, that is quite irrelevant because the basic nature of outsourcing services is such that they remain fairly protected from the onslaught of inflationary trends. The main cost elements are Information Technology, Telecommunication systems and professional skills that are relatively less affected by rising oil prices. Even with rising oil prices, most business outsourcing service providers are still delivering cost savings of around 40% to 45%, something that provides hard evidence to the effectiveness of outsourcing services.

As opposed to what some economists would like to believe, the reality is that the recent oil price hike is just a passing phase and is not sustainable. As demand decreases due to high prices, it is only logical that oil prices will come down eventually. However, since your business may have to survive to see that day, it would be better if you start taking proactive steps to secure your business interests. Hiring business process outsourcing can help and you should not let go of the opportunity.