How insurance companies are outsourcing business processes and new technologies to move faster, become more efficient and launch new businessesA new report, the ISG Provider Lens™ , from Information Services Group (ISG) reveals an industry need for ‘efficiency, agility and new capabilities’; Access the report here.
May 05, 2021 — STAMFORD, Conn.–(BUSINESS WIRE)–U.S. insurance companies are accelerating their adoption of digital technologies as the COVID-19 pandemic disrupts their operations, in many cases turning to business process outsourcing for efficiency, agility and new capabilities, according to a new report published today by Information Services Group (ISG) (Nasdaq: III), a leading global technology research and advisory firm.
The 2020 ISG Provider Lens™ Insurance BPO Services report for the U.S. finds most of the country’s life and retirement (L&R) and property and casualty (P&C) insurance companies have begun digital transformations, though they are at varying stages of the process. When COVID-19 sparked changes, such as employees being forced to work remotely and potential policyholders applying for coverage without meeting an agent in person, companies that had been slowly changing had to speed up just to survive.
Business process outsourcing (BPO) providers are helping insurers achieve more growth and efficiency in response to changing market dynamics, including increasing regulation and customer demand for modern digital experiences, the report says. Companies are outsourcing business processes instead of continuing to operate inflexible legacy systems where data is locked up in silos.
Insurers Need ‘Agility And More Technology’
“The pandemic showed how much insurance companies need agility and modern technology,” said insurance specialist Dennis Winkler, senior director, business services, for ISG Americas and a co-author of the report. “Rather than make big investments in new systems, many are turning to experienced outside providers.”
Insurers that outsource business processes can focus on more strategic activities instead of on squeezing new capabilities out of old platforms, ISG says. BPO providers are bringing robotic process automation (RPA), artificial intelligence (AI), chatbots and other technologies to the table, while providers of third-party administrator (TPA) services are carrying out essential tasks through modern digital ecosystems. Some insurance companies are leveraging these technologies to quickly launch new businesses, while others are replacing their older systems wholesale.
Business process outsourcing can help insurers analyze the growing amount of available data to build a unified, 360-degree view of customers, according to the report. Analytics also can help companies improve risk management, more accurately price policies and better detect fraud. In addition, BPO and TPA providers offer technologies that can help insurers create user experiences similar to what consumers have come to expect from online retail, such as a fast and simple policy application with an immediate response.
Concerns About Data Security
Amid growing concerns about data security, insurance companies are turning to service providers that, in some cases, can keep customer information more secure than insurers’ in-house systems do, the report says. Providers are implementing tools that may be cost-prohibitive for companies to build on their own and introducing new technologies such as blockchain, which can eliminate time-consuming data validation and verification.
The 2020 ISG Provider Lens™ Insurance BPO Services report for the U.S. evaluates the capabilities of 18 providers across three quadrants: Life & Retirement Insurance Services, Property & Casualty Insurance Services and Third-Party Administrator (TPA) Services.
The report names Cognizant, DXC Technology, EXL, Infosys and WNS as Leaders in all three quadrants. Genpact and SE2 are named as Leaders in two quadrants each and NTT DATA is a Leader in one quadrant.
In addition, Accenture is named as a Rising Star—a company with a “promising portfolio” and “high future potential” by ISG’s definition—in all three quadrants.
About ISG Provider Lens™ Research
The ISG Provider Lens™ Quadrant research series is the only service provider evaluation of its kind to combine empirical, data-driven research and market analysis with the real-world experience and observations of ISG’s global advisory team. Enterprises will find a wealth of detailed data and market analysis to help guide their selection of appropriate sourcing partners, while ISG advisors use the reports to validate their own market knowledge and make recommendations to ISG’s enterprise clients. The research currently covers providers offering their services globally, across Europe, as well as in the U.S., Germany, Switzerland, the U.K., France, the Nordics, Brazil and Australia/New Zealand, with additional markets to be added in the future. For more information about ISG Provider Lens research, please visit this webpage.
A companion research series, the ISG Provider Lens Archetype reports, offer a first-of-its-kind evaluation of providers from the perspective of specific buyer types.
ISG (Information Services Group) (Nasdaq: III) is a leading global technology research and advisory firm. A trusted business partner to more than 700 clients, including more than 75 of the world’s top 100 enterprises, ISG is committed to helping corporations, public sector organizations, and service and technology providers achieve operational excellence and faster growth. The firm specializes in digital transformation services, including automation, cloud and data analytics; sourcing advisory; managed governance and risk services; network carrier services; strategy and operations design; change management; market intelligence and technology research and analysis. Founded in 2006, and based in Stamford, Conn., ISG employs more than 1,300 digital-ready professionals operating in more than 20 countries—a global team known for its innovative thinking, market influence, deep industry and technology expertise, and world-class research and analytical capabilities based on the industry’s most comprehensive marketplace data. For more information, visit www.isg-one.com.