INSURANCEAND 2021; WHYINDUSTRYLEADERS AREBETTINGBIGON OUTSOURCING WHITEPAPER

INSURANCEAND 2021; WHYINDUSTRYLEADERS AREBETTINGBIGON OUTSOURCING WHITEPAPER

Insuranceand2021; WhyIndustryLeaders arebe ngbigon Outsourcing TheCovid-19crisishasbroughtforthmassive changestotheinsuranceindustry,compelingitto sheditsstatusquoforever. Thepandemichasmadeitindubitablethataffairsinthearenacannotcon nue inthewayprevalentinthepre-coviddays.insurershavealreadypaidheavily fortheirunder-preparednessforanyeventualityofthatscale,neither opera onalynorstructuraly,andaredoomedforworseiftheycon nueto ignoretheneedofthehour.astheworldstridestowardthenew wayoflife,it isabout meinsurersshi edtheirfocustotherecalibra onoftheir ecosystem tosyncitwiththeongoingevolu on. However,it snotalbadnewshere.amidstthechaos,thereexistencouragingsigns too.inthecurentcontext,leadersandinfluencersoftheindustryhavealready startedspearheadingthechangethatseemsimminentinthenew decade.the moststrikingandnoteworthyamongtheseistheirunprecedentedinclina on towarddigi za onandprocessoutsourcing.ata mewheneventsareturbulent andmostthingsuncertain,onefactremainsintact theexponen algrowthof insuranceprocessoutsourcingin2021andbeyond. By2025,theinsuranceBPO marketisexpected togrow atover20% CAGR.

OutlookoftheIndustryin2021: KeyTrends,Opportuni es,and Ac onitems Tes ngmarketcondi ons Withforecastshin ngatlimitedgrowthandmediocre sales,2021wilnotbeaneasyyearforinsurers.this, coupled with the lossesincured lastyear,wilforce insurerstothinkoutoftheboxtoregaintheirlosttrac on. Awayoutistoconsiderofferingnew coveragelimitswith revisedtermsonpoliciessothataddedprotec oncanbe offeredfrom anyfurtherwavesofthevirus.expertsbelieve thiswilhelpthem getasteadyfoo ngthisyear. However,thechalengeliesinensuringthatwhenpremium rates rise,customersdonotmoveaway.thisisonlypossiblebysome temp ng value-addi ons to exis ng cover plans and the introduc onofnew anda rac veproducts.thekeyhereisto facilitate and incorporate the feedbackofthe marketand the expecta onsofthecustomerandleveragethoseasananchorto maximizethecustomerreten onrate. Data-drivenStory The failure to leverage data to theiradvantage has boomeranged on insurers. With the market so unpredictableandstakessohigh,thenextyearorsocan determinethesuccessorfailureofinsurancecompanies. Hence,theyarele withnowaybuttoembracethe prowessofdataanalysisandevalua ontostayintherace. Fortunately,possibili essuchasbigdataandmachine inteligenceareverymuchwithintheopera onalambitof insurers.infact,mostmajorplayershavealreadyinvested insuchtechnologiesandarereapinghandsomedividends. Bigdataisbeingpursuedbyinsurerstotailorpoliciestothe needsandpreferencesofprospects.in2021,insuresmust focusonharnessingrelevantdatatomaketheirworkflows robustandimmunetoalfuturecrises.

TailoredProductsandFairerPremiums Theinsuranceconsumerhasalwaysbeenthebiggestfactorthat determinesthesuccessofinsurers.today,themilennialconsumer formsthebiggestpopula ongroup,andismoredemandingthan ever,seekingpersonalizedinsuranceproductsandengagement.to catertotheirtoweringdesires,insurersmustshi theira en on from thetradi onalofferingstothesophis catedonesbackedby technology. Tothatend,insurersmustadoptnew waysofconduc ngbusiness,suchasdigitalmarke ng,datasourcingfrom socialmedia pla orms,automa ngcustomer-facingprocessessuchascustomerservice,underwri ng,etc.inview ofthenew worldinthe post-covidera,it simpera veforinsurerstodevelopandnurtureaconsumer-centricapproachandmakeconsumerexpecta onsa priority. New RiskModels,Shi ingcapacity In 2020,theworld saw age-old insuranceriskmodels upendedbytheonslaughtofthevirus.instancesofclaims skyrocketedwhileopera onscametoahaltowingtothe unavailable/subpar remote work infrastructure. Furthermore,the rising numberofcyber-a acksgave sleeplessnightstoinsurerswhiletheystruggledtokeepthe revenuewheelspinning.thecombinedeffecthasforced insurerstoini ateanddrivestructuralchangespertaining totheirfundamentalbusinessframe. Inresponsetothetumultuous mes,theindustryhas begunexploringop onsthatleadtofinancialresilience. Thegoalistoestablishsteadystreamsofrevenuethat would facilitateenough cash reservesneeded to keep opera onsrunningforatleastayeareveninthefaceof pandemic-likesitua ons.insurersmustrigorouslyevaluate sustainablewaysofunderwri ngandputprocessesin placetolaunchnew productlinesthatofferadefini ve edge in the market.thiswould consequently lead to substan alshi sintheiropera onalcapacityandproduct pricing.

DigitalDistribu on/channelrevolu on Insurersthats lresistdigi za onareonthevergeofmissingthe boatforever.withtheworldridingontechnology,theycannot operateinisola onandmustgowiththeflow.digi za onin processessuch asunderwri ng,finances,policy issuance and renewals,andclaimsmanagementarejustthe poftheiceberg.in the coming days,automa on is set to trigger a complete transforma onoftheerstwhilereliablewaysofconduc ngbusiness. In2021,customer-facingdigitalinnova onsshouldbethepriority,par cularlyininsurancedistribu on.alreadyaba legroundfor insurers,thebrewingrevolu oninthedistribu onchannelswilonlyintensifythegamefurther.insuresmustcashinontherapid prolifera onofinsurtechfirmsthatarebeingbackedbyaggressiveventurecapitalists.thisba leforimproveddigitalsalesand servicewouldseetheborowerasthebiggestgainerin2021andbeyond. It ses matedthatdigitalclaimscan reduceclaim expensesby25 30% andboostcustomersa sfac on scoresby20%.

FactorsPoweringtheGrowthofInsurance BPOsin2021 Theabovesec onelucidatesthesubstan alchangestheinsurancesectorisundergoing;italsopaintsapictureofhow theinsurance equa onwouldlookoncethetransforma oniscomplete.onesignificanttrendgrabbingeyebalsisthesoaringinvolvementof insurancebpo (BusinessProcessOutsourcing)firmsintheopera onalaspectsofthesector.thepandemichasonceagain underscoredtherolebposplayinthesuccessofinsurers. In2021,theroleofinsuranceoutsourcingpartnerswouldfurtherintensifyastheindustrytransi onstothenew reali esofdoing business.thegrowthofinsurancebposwouldlargelybefueledbyunrestrainedcustomerdemands,insanemarketcompe on, risingopex,andinsurers needtostaycrisis-proofinthefuture. TechInvestmentPriori esforinsurersin2021 Cybersecurity 21% 52% 20% 16% 4% Dataprivacy 19% 43% 25% 13% 5% Expectalargeincreaseinspend Dataanaly cs Expectaslightincreaseinspend 15% 39% 38% 17% 3% Expectnochange Digitalchannels Expectaslightdecreaseinspend 14% 36% 41% 19% 4% Expectalargedecreaseinspend Robo cprocessautoma on 9% 25% 31% 38% 8%

BrutalityoftheCovid-19Pandemic Whilethedisastercaughtmostinsurersoffguard,theoneshavingthebackingofanexternalpartnertokeepopera onsrunning, weretheleastaffected.withmostemployeesforcedtoremainconfinedtotheirhomesformonthsatstretch,runningopera ons withoutthehelpofanexpertinsuranceservicesproviderturnedouttobeanimpossiblefeat. Insurance BPO firms specialize in offeringhigh-qualityback-officeservices suchaspolicymanagement,insurance repor ng,dataprocessingandmining, claimsadministra on,etc. Theyofferservicesatpricesthatarejust afrac onoftheexpensesassociated within-houseteams,enablinginsurers to save substan aly,par cularly in tough meslikethese. InsuranceBPOsareknowntodeploy cu ng-edgetechnologies.thishelps theclientgettheirhandsonthebest IT infrastructurewithouthavingto investheavinginit. Sixty-onepercentofinsurancepersonnelsurveyedsaythatover thenext12-to-18months,theyexpecttoreduce expensesbetween11% and20%.

CompetenceinHandlingHard MarketCondi ons Although thevaccina on drive isgaining pace,there snodenyingthatthemarketis s lfarfrom recoverybyanymeasure.it s undebatablethat2021 isgoingtobean uncertainyearforinsuresastheytoilto regaintheirlostglory.inthispursuit,any mistake could cause them dearly.hence, havinganexpertintheform ofaback-office serviceproviderisanon-nego ablerequisite forinsurers. Consideringthevola lecircumstances, everyplanmustbebackedbydata.to that end, insurance BPO services leverage data analy cstools,helping theirclientsto zero in on the right offerings. Insurershaveto beultra-sensi vein deciding on the pricing models and coveragebenefits.bposcanhelpthem targetthe rightcustomerbased on demographics,riskprofiles,etc. Most insurers are opera ng understaffedwhiletheworkload is pilingfrighteningly.theyshouldrely on BPOs whose services can be scaledatwilaspertheiropera onal requirements. CostsandScalabilityCondi ons Thepandemicinflictedunprecedentedfinanciallossesoninsurersintheform ofhigherclaims,policydiscon nua on,non-payment ofpremiums,etc.ontheotherhand,insureswereforcedtocurtailtheirplanofexpandingopera onstonew geographiesand businessver calsowingtothehavocinthemarket.whileexploringgrowthopportuni esisvital,in2021,insurersshouldfocuson steadingtheirrockingfinancialboat. Processingcostsandclaimspaymentsusualyform about 80% ofthepolicyholder spremium. Withthemanualtaskstakenoverby theoutsourcingpartner,theclientis relieved of the need to hire employeesonthepayrol,par cularly whentheyarefigh ngaseverecash crunch. Withthedigi za onoftheinsurance universe in the post-covid era, resourcescanbesavedbyreducingthe need for paperwork and manual folow-upsbyhumanagents. Insurance back-office servicesemploy expertswhocancutdownonthe me on tediousprocessessuch asclaims verifica on and se lement, saving enormouscosts.

TechnicalyEquippedforthePost-pandemicSe ng Theinsurancespaceisnolongertheoneitusedtobebeforethecrisisra ledtheworld.withprospectsmoredemanding,themarket morecompe ve,margins ghter,andriskshigherthanever,itseemslikefic onhasturnedintoacommonplacerealityforinsurers. Forthem to ghtenuptheircontrolsonsuchvariables,technologyisthebestbet. Theapplica onofar ficialinteligence enablesinsuresto tailorpersonalized policiesandtackletherisinginstancesof claims,twodesperately-neededabili es inthecurent mes. InsuranceBPOscanharnessblockchain technologytohelptheirclientsrealizea never-seen-before degree of transparencyandaccountabilityintheir opera ons. The demand for ready-to-use insurance pla ormswould peakin the coming days, making it a no-brainerforinsurerstojoinforces withacompetentinsurtechfirm.

AdvantagesofOutsourcingInsuranceProcessesin2021 MinimizesRisksofExposure Atpresent,thehighestpriorityofinsurersmustbetosafeguardtheirworkforcefrom contrac ngthewildlyspreadingvirus,par cularlyinitssecondphase.asinsurance processesmostlyinvolvefieldjobssuchasunderwri ng,thechancesoftheexecu ves contrac ngthevirusarehigh.ata mewhenemployeesarealreadyinapanic regardingtheirwelbeingandfinances,healthrisksofanysorttotheemployeesarethe lastthingthemanagementwants. Competentinsurtechshavefoundaneffec vewayoutofthiscatch-22,owingtotheir technologicalsupremacy.mostserviceprovidersaretakingtovirtualinspec onsusing technologysuchasdronesandvideocals.forreal- medataaccessbytheinsurers, theyusecustom mobileappsthatcanpuldatafrom cloudservers,processand analyzeit,andpresentitfordrawingrelevantinsightsandconclusions,alwhile workingfrom theirofficeorhomes. Asurveyofinsuranceexecu vesrevealsthatjust25% ofthem agreethattheirfirm had aclearvisionandanac onplanforfinancialresilienceduringthecovid-19crisis. EnhancesManagement Thesuddenneedforremoteworkinghascaughtinsurersonthewrongfoot,astheywerenothalfreadyfor it.thestaffstruggledtoadapttothenew normandcopingwiththeincreasingclaimsevenbyworkingextra hoursproducedlukewarm results.themanagementfoundthemselvesindeepwaterswithmoun ng problemsandcomplexi essuroundingdistribu onchannels,monitoringoffshorecenters,tackingfraud risks,andmanagingcustomersupport,amongothers. Thebiggestbenefitofropinginareliablepartneristhatwhileitassumestheresponsibilitytotakeonthe chalengesoftheback-officeopera ons,thecoreteam canputitsmindtotheorganiza onalrecoveryand growthroadmaps.insurtechscanenableclientswithaseamlessmassshi toremoteworking,se ngupthe founda ontohelpthem for fytheiropera onalengine.

Re-envisioningTimeandExpensesStrategicaly Thepandemichastriggeredandamplifiedaterifyingfinancialcrisisintheindustry.It stemmedfrom premium lapses,plumme nginterestratesandequityvalua ons, decreasedsales,andreducedinvestmentopportuni es.also,itseemsliketoday insurersareracingagainsttheclockwithagentsmul taskingbutendingupbeingless produc ve,owingtothelackofinfrastructureandexper se. Outsourcing hasalwaysbeen astrategictoolforsmartinsurersto keep their opera onal meandexpensesincheck.withareliableservicesfirm,insurerscan adjustclaimsremotelyandefficientlywiththeassuranceofmee ngnormalclaims handling meframes.theymustfocusontheapplica onofrobo csandcogni ve technologiestoboostopera onalefficiencies,whichalsocutsdownontheirreliance onthehumanworkforce,thusreducingtheirexpenses. HistoryofProvidingQualityServices Whenreflectedonthechainofeventsinthelastfi eenmonths,it seasytoconcludethatwhilethevirushas beenruthlessontheinsuranceindustry,somelevelofforethoughtandpreemp veac onscouldhavekept thedamagetoaminimum.whenalissaidanddone,itcannotberefutedthattheindustrydeservessome shareoftheblame.whiletherestoftheworldwaspreparingfortes ng meswelinadvance,mostinsurers prefereds ckingtotheirlegacysystemsandprocesses,leavingtheirweaknessesunguarded. Outsourcinghasalwaysworkedmagicalyforinsurancecompanies.This metoo,bpo servicesarefigh ng itoutfortheirclientsonalfrontsfrom customerserviceopera onstothecomplexindustryregula onsto cybersecurity.inthefuture,wheneverythingnormalizes,playerswilneedthehelpinghandoftheirpartners tomanagetheheavyworkload,standuptoprospectsasacustomer-centriccompany,maintainhealthy margins,andmostimportantly,future-prooftheirbusiness. Inasurvey,79% ofrespondentssaidthatthepandemicexposedtheshortcomings inthedigitalcapabili esandtransforma onplansoftheircompany.

Cri calinsurancebpo ServicestoStartWith Asthequestforautopianopera onalframeworkinthepost-covideragoeson,insurerscanstartcau ouslybydelega ngcommon back-officetasks.whileoutsourcingisthemagicwandofsuccessfulinsurersaroundtheworld,star ngtheengagementwith rela velysimplerprocessesandmovinggradualytothecomplexandmission-cri caloneshelptryoutdifferentmodels.below are someofthemostpopularprocessestobeginthejourneytoopera onalefficiency. PolicyAdministra on Asinsurersmakeacomebackin2021,theywilbewelcomedbycomplexpolicyadministra onissues.aspectsthatwouldmake policymanagementcri calincludemassivedocumenta onneeds,slow-movingworkflows,massivebacklogs,andotheropera onal chalenges.whenrepe vetaskssuchascrea ngquotes,execu ngrenewals,checkingandissuingpolicies,preparinglossrun reports,etc.aretakencareofbytheoutsourcingpartner,theclientrealizesthefolowingbenefits. A strong policy administra on system helpsinsurerswiththeir investment decisions.it helps ensure that investments are properlyu lized,anessen alin thepost-covidage. Accurate policy administra on services leading to be er rela onswithclientsandagents, thusfavoringbusinesssuccess. Prospects have a good experience while applying for policies. Increasedprocessaccuracyand lowercustomer-reportederors, leadingtoaccurateiden fica on ofcustomerneedsand hence, fewercustomergrievances. LossRunProcesses Goingforward,insurershavetobecau oustoavoidbusinessrisksasthepandemichasalreadyle them bruised.lossrunprocesses deservespecialfocusastheyareinstrumentalinspo ngandassessingbusinessrisks.inthecost-sensi vepost-covidera,insurers wouldneedtofine-tunetheirlossrunrepor ngforreadjus ngtheirpricingandpolicytermsin-linewiththemarketdynamics. Commonlossruntaskswidelyoutsourcedtoassisttheinternalteam includefilingoflossrunreports,extrac onoflossrun informa on,analysisofreports,prepara onofclaimsreports,andothers. Lossrun service providersprocess reportsusingspecialso ware,saving meandmoneyfortheclient.they can review the reports and draw insightsaboutriskmanagementand losscontrol. Thelossrunteam canestablishclose coordina on with the in-house underwri ngteam tohelpthem with theirqueries,thereby helping in an accurateevalua onofrisks. Theclientgetsaccesstodigitalsolu ons thatensureaccuratelossrunprocessing. Suchsolu onssendautorequestsand folow-upsforeasyrepor ngandbe er stakeholdercommunica on.

Cer ficateofinsurance Managingcer ficatesisatediousprocessandrequiressubstan alresources.sinceinsurersandinsurancecariersareaimingfor resourceop miza on,it sbesttocalontheexper seofanexternalserviceprovider.asthevolumeofdailycoverage transac onsisonasteadyrise,outsourcingwouldgiveinsurersabreathertoplantheirapproachinthenew era.thisispossible whenawel-groundedbpo firm holdsthereinsofthecumbersomeprocedures,addi onalinsuredrequirements,andspecific languagesassociatedwiththecer ficateofinsurance. Specialized COI management partners are wel trained to maintain rela onships with al stakeholders;they can explain theclient srequirementstoeach partytoensurecompliance. AqualityCOIpartnerproac vely manages cancela ons and reinstatements.they help the clientwithaccurateinforma on on policies, in an easy-to-comprehendformat. The client gets opera onal flexibilityasthe partnertracks policyexpira ondatesandstaff according to the fluctua ons, relieving the client of the coordina ontask. PolicyIssuanceandRenewals Among various resource-hungry processes, policyissuanceandrenewalsdemandspecial a en on.withtheaverageinsurerhandlinga mul tudeofrenewalrequestsatthesame me,the concerned team is likely to be swamped with paperwork, implying high chancesoferors.thisunderlinestheneedfor acompetentpartnertoreview andvalidate policypaperwork,liaisewithunderwritersfor missingdetails,verifycustomerinforma on, handledata,etc. TheBPO serviceproviderstreamlines and standardizesthe issuance and renewal processes, enabling the clienttoimprovetheirunderwri ng andproducecleanerpolicies. Theserviceprovidercanevaluatethe associatedrisk(s)inrenewingapolicy andhelptheclientmakeadjustmentsto thepoliciestomi gatethethreats. Theycanhelptheinsuranceclientsto avoid businesslossby ensuring that policymodifica ons(ifany)arefactored inwhilerevisingthepolicypremiums.

Back-officeSupportforInsuranceUnderwri ng Astheinsuranceecosystem stepsintoanew worldofrisksandopportuni es,alotrestsontheunderwritersastheyaretheones whodeterminetherisksandchancesofsuccessforalpolicysales.underwri ng,pre-underwri ngfunc ons,inpar cular,are themostcri calastheyareusedtodeterminebothriskexposureandthebo om lineoftheinsurerevenbeforetheactual underwri ngcommences.forinsurerstotryoutnew offerings,accurateunderwri ngiscrucial,henceoutsourcingitisprudent. Tech-savvy underwri ng firms employ automated workflows and advanced predic ve analy cstohandlecasesbased on their probability indices, enhancing the chances of profitability. To expedite the process,they reduce the manual load by leveraging technology for automated document intake, mul -departmental hand-off processes,taskpriori za on,etc. The client s team can get account-levelguidancebasedon prospectsandtargetrates.the use of AI helps them with real- me corec ve ac onsfor be eroutcomes. Aninsurancesurveyclaimsthat74% ofrespondentsfeelthattheemployees fearof comingtotheofficewilaffecttheirorganiza on spost-covid-19success. Inthepre-Coviddays,insurancewasmerelyviewed asasafeguardbyconsumers.thepopularprac ce wasto purchase the cheapestplancovering the maximum scenarios. However, everything has changed,rathertransformed,withthestrikeofthe pandemic.today,theconsumerdesirestailor-made policiesandpersonalizedengagementfrom insurers and isbeing more cau ousthan everin their decisions. Ontheflipside,insurersareeyeingtheopportuni esthatthenew worldpromises;however,theroadtothosepassesbyfundamental changesintheirwayoffunc oning.withtheworldge ngdigitaland thecountoftech-savvycustomersrisingbytheminute,cariershave gotnoop onbuttojoinhandswithacapableandtrustyinsurance servicesprovider.asanotherdecadeunfolds,insurerswouldseeboth theecosystem andstakeholderexpecta onsevolving,andmostofthe changes,ifnotal,would have technologicalimplica ons,which necessitateexternalhelp.

WhoWeAre AndWhyYouCan CountOn OurInsurance Services Theinsurancelandscapeisundergoinga rapid transforma on and the industry playersmuststayontopofthechangesto ensure survival. At Insurance BackOfficePro,wemasterthekine csof thisevolu onandarehelpingourclients reimaginetheirworkflowsfrom designto execu on.ata me when the en re industryisindistress,oursolu onsare turning out to be a game-changer, deliveringresourceandcostop miza on, improving process accuracy, and providingaclearview ofthefuture. Email info@insurancebacko cepro.com Web www.insurancebacko cepro.com