Staying competitive

Given the degree of process customization in the insurance industry and the importance of these operations, executives have been somewhat reluctant to outsource core processes. However, that mindset is changing, influenced by such factors as the drive for cost efficiency, technology and telecommunications advances that reduce the value of physical proximity for both the outsourcer and provider. Business process outsourcing can help reduce costs between 10% and 70%. In addition, it can improve efficiency and customer service, turn fixed costs into variable costs, build systems and refocus carriers on their core business - all with minimal additional capital expenditures. Determining the processes, the locations and the types of technology to use are among the most critical decisions insurers should make prior to outsourcing.