The insurance industry had started showing signs of recovery in terms of operational resilience, profit prospects as the world gradually learnt to co-exist with the pandemic. Just when things started looking up, the emergence of Omicron, a new Covid variant resulted in a surge in infections. To curb the infection rate, governments across countries-imposed lockdowns which again disrupted the operation of the insurance industry. This led several insurers doubt about the cohesive nature of their business model, chances of recovering their financial losses, efficacy of a risk profiling model, and others. Such doubts have reinstated the importance of insurance outsourcing during the pandemic. Here’s a look at how outsourcing can help insurers thrive even in the face of the Covid 19 pandemic and its variants.
Recovering from Financial Losses
Outsourcing vendors have resources stationed in areas that are low cost and chance to be less affected by the pandemic. Such resources can get the job done in half the remuneration required by in-shore resources. This will allow insurers the liberty to axe the stagnant resources or re-engage them to deliver other on-demand core services. Third-party vendors provide cost-efficient service packages that cover a range of critical services such as loss run report, underwriting, customer risk analysis, and others.
Addressing Resource Constraint
Insurance BPO service providers open access to resources situated at different geographical locations. Service providers have the necessary infrastructure that enables resources to remotely provide back-office support for a range of critical functions such as renewals processing, underwriting, claims management, and others.
Support Risk Management
Insurance BPO firms use data analytics models such as insurance risk analytics to forecast a customer’s risk of defaulting premium payments. This analytics tool studies customers’ present and past transaction behavior, financial health to determine their propensity of turning into a defaulter. These analytics insights are critical to address contract level risks.
Support Claim Management
Insurers are finding it hard to manage a surge of the pandemic related loss claims with resource shortage and high claim settling costs. Insurers are also witnessing a rise in claims-related frauds. Outsourcing vendors use cutting edge technologies and predictive analytics to verify claim authenticity, to create, and track claims correspondence. They are capable of automatically as well as manually allocate claims and track the claim resolution.
Conclusion
Doing a self-evaluation is as important as evaluating the ability of a prospective vendor. When we say self-evaluation, we mean that insurers must craft their business goal prior to finalizing a contract with an insurance BPO service provider. Business goals must factor in the potential services that require an external intervention on a long or a short-term basis. Insurers must consider their operational infrastructure, their budget, and decide on offshoring or inshoring their requirements.