Technology research and advisory firm TechNavio estimates the current global Insurance BPO market at more than $4.6 billion.
The insurance business process outsourcing (BPO) market is growing at a steady clip, according to an in-depth study of the market conducted by TechNavio, a technology research and advisory company. The insurance BPO market is expected to grow an average 5.19 percent year over year between 2013 and 2018, according to the report, “Global Insurance BPO Market 2014-2018.” The market size in 2013 was estimated at $4.69 billion and is expected to reach $6.04 billion by 2018
Insurance BPO is a sub-segment of the banking, financial services, and insurance BPO segment. BPO service providers offer a variety of support some of the leading financial institutions and custodians in the world. Outsourced services in the insurance industry typically leverage BPO service providers that have expertise in the insurance domain. The providers administer and manage various services, which can include back office systems such as human resources or finance and accounting, as well as front office services like contact centers, based on defined and measurable performance criteria. According to TechNavio, insurance companies are starting to outsource more complex processes than the traditionally outsourced non-core processes, including actuarial analysis and underwriting and analytics support.
Insurance companies are outsourcing their operations to cut costs, reduce time to market, comply with changing regulations, standardize processes and boost the value of their offerings, according to TechNavio.
According to the report, “many client firms are outsourcing their back-office functions that require a stable infrastructure, capital investment, and human resources. Outsourcing these functions enables firms to improve their operational efficiency and cut costs through labor arbitrage.”
There are several challenges facing the global BPO insurance market, according to the study. Data security is one such challenge, largely in part of the confidential nature of the insurance market data. Extra measures need to be taken to ensure data confidentiality, the study says. Another challenge is the high attrition rate.
TechNavio segments BPO services for the global insurance BPO market into Property and Casualty and Life and Pension and examines spending across these two segments and key geographical regions in the market. Vendors included in the study include EXL Services Holdings, Genpact, TCS, WNS Holdings, Accenture, Cognizant, Computer Sciences, Dell, Infosys, Wipro and Xerox, among others.