Introduction

Insurance BPO represents one of the most mature offerings within the BFSI BPO market. Notwithstanding some challenges, the value proposition around managing growth and cost pressures, addressing changing consumer behaviour needs, and effectively dealing with operational pain points increasingly drives insurance companies to adopt Insurance BPO. This has led to the revival of the Insurance BPO market, after a dip, post the financial crisis. However, the adoption pattern, across geographies and insurance segments, is changing and so are the BPO solutions. This is reflected across multiple dimensions, such as scope of services, technology requirements, global sourcing, and pricing structures, among others. Service providers need to align their offerings and make the necessary investments to address these changing requirements and capture the significant untapped potential.

In this research study, we analyze the third-party Insurance BPO market across the Life & Pensions (L&P) and Property & Casualty (P&C) segments. We focus on:

• Buyer adoption trends in Insurance BPO, including market size, growth, and potential
• Drivers for and challenges to the growth of Insurance BPO
• Characteristics of Insurance BPO solutions, including scope of services, global sourcing, technology, and pricing models
• Assessment of Insurance BPO service providers

Scope and methodology

• The focus of this report is the global Insurance BPO market across the L&P and P&C segments
• This report focuses on third-party Insurance BPO and does not include shared services/captives or TPAs
• From a scope perspective, this report provides coverage of the non-voice and industry specific BPO in insurance including business acquisition, new business, policy servicing, claims processing, and insurance-centric F&A. It does not include horizontal business processes (like horizontal F&A, HR, and procurement) for insurance clients
• The analysis in the report leverages the following sources of information:
  • Operational profiles of 12+ Insurance BPO service providers
  • Executive-level interviews with leading insurance BPO service providers and Insurance BPO clients
  • 250+ publicly announced Insurance BPO contracts signed as of Q1 2011
  • Everest Group’s experience and IP in the Insurance BPO market

Content

This report will assist key stakeholders (buyers, service providers, technology providers) understand the changing dynamics of the non-voice, industry specific third-party Insurance BPO market across the L&P and P&C segments. This report provides comprehensive coverage of the global Insurance BPO market including key business and operating models, buyer adoption trends, solution characteristics, and the global service provider landscape.

Some of the findings of the report, among others, are:

• Contract signings in Insurance BPO dipped in 2008-2009 but are starting to witness a revival as the global economy begins to revive. Insurance BPO is currently a US$3.5-4.5 billion market, expected to grow at 10-12% YoY in the near term
• The potential for growth of Insurance BPO is significant – nearly 30 times the current market size - or ~US$120 billion
• Large insurers dominate the Insurance BPO market but adoption by small and medium buyers is increasing. In the last three years, the split between contract signings across large and small/mid-sized insurers is nearly 50:50
• Transaction-intensive functions (policy administration and claims processing) are the most mature insurance functions from a BPO perspective. More complex processes, such as actuarial analysis, underwriting and analytics support are increasingly getting outsourced
• Everest Group assessed the Insurance BPO capabilities of 12 service providers across multiple dimensions (scale, scope of services, geographical footprint, global delivery network, and technology adoption). The major service provider investment themes include regulatory compliance and risk management, technology, domain expertise, and expansion of geographic footprint