P&C insurers need to respond to the strong and growing consumer preference for digital channels, and most will turn to service providers to help them build multi-channel capability and improve time to market with these digital products and services
Dallas, TX (PRWEB) October 17, 2016
The global property and casualty (P&C) insurance business process outsourcing (BPO) market registered nearly 17 percent compound annual growth rate (CAGR) over the last few years to reach US$1.45 billion, according to new research from Everest Group. Amid political uncertainties in the United States (due to the presidential election) and the United Kingdom (due to Brexit), Everest Group expects the market to grow at 14 to 16 percent, reaching US$1.9 billion by 2017.
The growth potential of the P&C Insurance BPO market is highly attractive to service providers, but with over US$460 million up for renewals in the next three years, competition will become more intense. Everest Group advises service providers to differentiate themselves through specific value addition capabilities, particularly analytics, robotic process automation (RPA), and third-party administrator (TPA) capabilities.
- Analytics: P&C Insurance BPO buyers are looking for a wide range of analytical capabilities, ranging from basic reporting-focused offerings to highly sophisticated predictive and prescriptive analytics solutions. Analytics solutions are particularly desired to address fraud identification and prevention. Fraudulent disclosures and claims amounted to 6 percent of the total premiums in the United States in 2015.
- RPA: P&C insurers are expecting service providers to offer RPA solutions that can automate rule-based processes. Automation solutions are being highly leveraged in claims processing as well as policy servicing and reporting, resulting in improved efficiency, faster processing, and higher accuracy. RPA can yield incremental cost reduction anywhere from 15 percent for offshore operations to as high as 45 percent for onshore operations.
- TPA: Certain processes such as premium collection, claims adjustment and claims disbursement, particularly in the United States, require service providers to possess a TPA license for each of the states to be operational in. Service providers with TPA capabilities and relevant BPO experience will be able to offer end-to-end process coverage, including the complex pieces and therefore have a competitive advantage.
“Digitalization is another key driver that will impact this market,” said Skand Bhargava, practice director, Business Process Services, at Everest Group. “P&C insurers need to respond to the strong and growing consumer preference for digital channels, and most will turn to service providers to help them build multi-channel capability and improve time to market with these digital products and services. Digitalization is one more example of how service providers are progressively managing a larger part of the P&C value chain, far beyond claims processing.”
These results and other findings are explored in a recently published Everest Group report: “Property and Casualty Insurance BPO – Annual Report 2016: The Dawn of Transformational Era – Adapt and Evolve to Succeed." This research examines the global non-voice, third-party, industry-specific P&C insurance BPO. It provides detailed analysis of market size and growth, solution characteristics, emerging trends and the service provider landscape for the market.
About Everest Group
Everest Group is a consulting and research firm focused on strategic IT, business services, and sourcing. We are trusted advisors to senior executives of leading enterprises, providers, and investors. Our firm helps clients improve operational and financial performance through a hands-on process that supports them in making well-informed decisions that deliver high-impact results and achieve sustained value. Our insight and guidance empower clients to improve organizational efficiency, effectiveness, agility and responsiveness. What sets Everest Group apart is the integration of deep sourcing knowledge, problem-solving skills and original research. Details and in-depth content are available at http://www.everestgrp.com.
Andrea M. Riffle, Everest Group
Robert Cathey, Cathey Communications