Offshore business process outsourcing (BPO) in the insurance industry is facing new challenges, ranging from rising wages in the most popular outsourcing destinations to natural disasters. In February, India experienced a major Internet outage caused by two severed undersea cables, while a heavy snowstorm left large areas of China without power. Additional concerns—related to setting up of contracts, quality of work and delivery efficiency — also have emerged in recent months, as insurance firms opted for third-party vendors to manage their onshore and offshore processes. Despite these challenges, the sector continues to grow, helped along by diversification strategies and the increasing value and complexity of the outsourced functions.
The insurance industry still considers the BPO market as an important cost-saving factor to meet their end-to-end needs. A 2008 report by KPMG International projected the knowledge process outsourcing industry to be worth $5 billion by 2010 in the financial sector alone. Additionally, firms are looking beyond cost arbitrage and moving toward more sophisticated and specialized areas of outsourcing of core insurance processes, as well as exploring further options in knowledge process outsourcing.
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access