Outsourcing refers to the practice in which the company usually delegates it’s in-house functions to the outsourced company so that the parent firm is free to focus on the core aspects of the business. However, outsourcing in today’s era has got maximum popularity. It is today seen as an effective tool to boost growth and stimulate productivity, particularly when the experienced staff is very hard, difficult and pretty expensive to hire.
Imagine insurance underwriters and producers spending their precious time which they can use on varied core productive things on routine data entry, rating, invoicing, ordering or reviewing inspection reports/APS, generating the loss and issuing policies. Very aptly seen, an agency’s knowledgeable and efficient workers are overqualified and overpaid for handling such minor tasks. It is feasible to employ them for business development and renewals – such activities require high- level interpersonal skills and risk control management.
The questions that come in front of us now is if the overqualified people will be working on the business development, then who will work on the non – core part of the business. Hence, the concept of outsourcing comes into place and it is thought to be feasible to transfer the non–core operations to the outsourced organization. Below mentioned are the four major tips for the successful insurance process outsourcing
1. Outsourcing is about growth, not downsizing:- One of the famous person “Thomas Friedman” said in one of his famous selling book “The best companies outsource to win, not to shrink”. Outsourcing is not thought as a bane. It is actually a boon which saves a lot of time of the qualified people in order for them to focus on the core business activities of the organization.
For agencies, where all the people are valued and experienced, the goal is not to downsize and cut costs, but it is to optimally utilize the human capital and time. By outsourcing routine tasks, agency costs are reduced, liberating resources which can be efficiently and productively utilized.
2. Communicate effectively for Smooth Functioning of Business:- There are a lot of key elements to assure effective communications between your service provider and your home office. The companies should look for those service providers who understand the operational challenges and specific objectives and abide by the companies policies.
Further, for a smooth transition of the business the parent company and the outsourced company should keep the communication track in place in order to remove any kind of obstacle/gap.
3. Ease of Implementation: - Some outsourcing companies involve substantial investment in the new IT systems, processes and training. Others do not. Normally, the service provider connects to your office with the same system which the parent company is using. This helps the company to easily outsource their work. Further, with the help of effective communication, proper systems in place and human capital, the implementation of work can be done smoothly and efficiently by the outsourced company.
4. Economics: - This is indeed one of the most important factors. Offshore solutions offer the best rate on investment – as long as quality control is maintained. Analyze your current fully loaded costs including –hiring, training, salaries, management supervision, attrition and then compare these costs once the work is outsourced to the service provider. Besides, just the financial gains, there may be significant benefits to outsourcing, such as greater ease of adding capacity to your operation by documenting workflows and by placing the burden of hiring, management and quality control on the service provider.