There's no question about it: A contact center is an expensive operation. Not only has the technology become more complex and costly over the past few years, but training and licensing agents-who leave at a clip of 25% to 40% annually-impact a carrier's bottom line.It's no wonder many insurers decide to farm out some or all of their customer care functions-to the tune of $1 billion per year, according to research from IDC, Framingham, Mass.

In general, companies can save anywhere from 5% to 25% in costs through outsourcing, industry statistics show. And, outsourcing is on the rise because of current economic conditions, says Robert Hayes, president, Carrefoure Technologies, a Brentwood, Tenn.-based call center consulting firm. "Everything is focused on cost reduction," he says.

But Hayes has misgivings about outsourcing a call center operation, especially if an insurer plans to use it to generate revenues. "The question companies ought to be asking themselves is: Do we really want to give up contact with our customers to an outside party?"

Bruce Griffin, chairman and CEO of Afni Inc., a Bloomington, Ill.-based customer-service outsourcing provider has a different perspective. "Outsourcing used to be a dirty word," he says. But, over the past two decades, "we've convinced companies that they can trust their customers to us."

In addition to employing sophisticated technology and a highly trained workforce, Afni provides regular reports to its clients on quality, productivity and ROI measurements, Griffin says. "We have to prove to our clients that we can provide customer service that is at least as good as, or better than, they can provide themselves."

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