Insurance business process outsourcing – The double-digit success story
In relative terms, the insurance business 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 business 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 business 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 business 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 business process outsourcing industry will soon be able to add even more interesting chapters to its double-digit growth and success story.