BPO insurance services: India to rule the roost

 

Initially the insurance companies have been more conservative in their attitude towards business process outsourcing. Particularly in offshore outsourcing, the insurance industry has been lagging behind. The main reason behind this hiccups were the myriad challenges arising from the intense competition, rising regulatory compliance and growing payouts due to scams and natural disasters. However, owing to competitive pressures the BPO insurance services will flourish in the coming years.

 The insurance industry is poised for significant growth in the next three to four years. The banking and financial services had been adapting the outsourcing services lately and insurance industry had also been in the scenario for some years. With expected cost savings and other significant advantages like focusing on core competencies and access to skilled labor, the insurance sector would soon set the foot firmly on business process outsourcing.

According to analysts, the Indian revenues from offshore insurance BPO services were expected to rise from $690 million in 2006 to about $2 billion by the end of 2010 (Valuenotes database). And this rise of income would in turn increase the employment rate from 41, 600 in 2006 to 100,500 in 2010. The BPO insurance industry is poised for higher growth than it has witnessed so far. This is mainly triggered by the need to reduce costs and differentiate products in an increasingly competitive environment.

A major part of the current offshore business in India is generated from insurance carriers in US and the rest comes from UK and Europe. The UK and Europe share are expected to increase thereby initiating business from the area. Moreover in India itself many of the domestic insurance companies have begun to outsource which would surely accelerate the competition globally.