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In 2021 insurance companies are operating in a highly competitive market with consumer buying decisions underpinned by cost. Insurance providers who can differentiate outside of cost through innovative products, services, and delivery models have an excellent prospect to shape and lead the future of insurance.

Customers are the driving force. To retain them, their rising expectations must be met. Notably, changing customer preferences across digital and mobile channels has accelerated change. Insurance companies have an opportunity to enhance service delivery with an omnichannel approach, personalised messaging and faster response times via the right channel, at the right time.

When it comes to complicated interactions such as payment disputes, research shows that 40% of customers prefer talking to a real person over the phone. Source: American Express.

When a problem is resolved correctly, customer retention is secure: When contact centres address issues on the first call, only 1% of customers say they’re likely to go to another business, compared to 15% when the solution isn’t adequate. Source: VoIP-info.

Therefore, it stands to reason that customer service design based on actionable insights can significantly improve customer attraction, retention, and the entire CX journey.

With the impact of the Covid-19 pandemic and the rapid pace of change, insurance companies realise the importance of modernising legacy systems that have impeded significant progress so far. The more insurance providers can learn about customers’ needs and expectations, the more they can develop tailored solutions based on how they feel, behave and interact—and how they make decisions.

At the same time, insurers must manage a broad scope of regulations and regulatory agencies. It is clear that there are many moving parts for insurance providers to contend with.

The challenge of Regulatory Compliance. How can insurers build resilience?

Insurance companies will need to master what is likely to be an ongoing influx of regulatory changes, however, there are pressures and costs associated with implementing these requirements. Business models may need to be restructured to cope with the demands. In turn, such changes may warrant new business functions, redefined roles, and skilled teams who know how to strategically navigate and manage change.

Compliance functions have gone through continuous development to monitor laws, regulations, regulatory requirements and internal policies to prevent or mitigate reputational risks. The growing compliance function requires the reinforcement of risk mitigation processes and actions spanning a wide range of risks together with alignment and cooperation with other governance units.

Additionally, the responsibilities resulting from GDPR will grow as digi­tal channels evolve and accelerate. Digital innovation and the channels used to deliver insurance services present new threats that stretch beyond the current regulatory scope.

This includes data processing, data management, and how systems can be improved and integrated. Comprehensive, agile measures, effective project management and process optimisation is required to safeguard expanding volumes of customer data.

Solutions to insurance-specific challenges.

The insurance sector faces a range of challenges in today’s business landscape including competition pressure, regulatory compliance, and maintaining service quality. Solutions have been found through increased innovation, a greater focus on risk prevention, and new service delivery models. Furthermore, insurers have found solutions to several business-specific challenges through insurance outsourcing services.

According to Andy McKie, Business Development Director at Covalen. “Insurers are looking at new service delivery models, including outsourcing, to enhance access to resources, capabilities and competence. Additionally, to support growth or to gain access to new customer markets, insurance companies are looking at ways of enabling greater flexibility when it comes to the provision of services”.

Outsourcing in the insurance industry delivers several benefits from access to skilled resources, increased controls and efficiencies—to faster insurance claims settlements. Outsourcing and Managed Service delivery models support a consistent level of staffing with relevant expertise and experience, whilst facilitating increased capacity. Insurance companies can leverage key support to identify and solve complex business and regulatory issues—and to manage a multitude of tasks within the claims management process.

Business process redesign creates opportunities for change while enabling the organisation to increase performance and efficiencies, reduce costs, and generate more value. By outsourcing insurance claims handling and customer support, insurers can benefit from notable improvements in service quality and customer retention.

A 5% increase in customer retention can produce 25% more profit. Source: Bain.

Outsourcing and Managed Services binds specific subject matter expertise with business process excellence, and essential tools and technology to deliver successful outcomes on time, and within budget. Process transformation and enhanced customer experiences can be amplified across business units and geographies that subsequently drive greater revenue opportunities.

During our initial engagement with clients, we take an approach whereby we develop an understanding of business needs, the needs of the client’s customers and what is influencing the target market.

Andy McKie.

Business Development Director, Covalen.

Focused solution design enables insurance companies to achieve specific goals across a number of business units and functions including claims processes, claims management, complaints resolution, and policy renewals. Insurance claims outsourcing enables insurance providers to leverage the right mix of skilled resources to meet seasonal demands, and efficiently respond to regulatory change.

Outsourcing in the insurance industry.

Insurance providers looking to efficiently manage challenges and deliver a competitive advantage may find Business Process Outsourcing (BPO) to be the right solution.

Key drivers include:

  • Recruitment, training & development
  • Access to a skilled talent pool 
  • Flexibility to scale resources up or down
  • Business process redesign
  • Access to new markets / growth opportunities
  • Increased quality of services 
  • Provision of flexible services
Insurance Industry Differentiation. Insurance Industry Differentiation.
Insurance Industry Differentiation. Insurance Industry Differentiation.

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4th March 2021