OUTSOURCING

OF INSURANCE
PRODUCTS/
ACTIVITIES

Bhawana Gurnani
Himanshu Bora
Kapil Rathore
Rishabh Rai
 INTRODUCTION

Services
COMPANY OUTSOURCER
Organization Service
Level Level
Agreement Agreement

Getting something done from external

sources rather than doing it within the
organisation.
How It Works?
• Outsourcing involves subcontracting parts of a company's value-chain, (i.e. steps in
the design, supply, production, marketing, sales, and services processes) to other
companies or contractors that specialize in those activities. Through outsourcing
agreements, the client company hires separate companies to perform specific tasks
in the value-chain on its behalf. Often, the work is performed under the name of
the client.

Why it Matters?
• The decision to outsource usually stems from a focus on lowering costs and
improving the efficient allocation of resources within a company. Outsourcing
allows a company to redirect its attention to its own competencies and hire outside
resources to handle other tasks. However, outsourcing requires a high degree of
standardization and management control in order to be effective.
Why do Companies Outsource?
 Key areas of outsourcing ?

•Information Technology/IT solutions

•Call Centers

•Finance & Accounting Outsourcing

•Procurement Outsourcing

•Textiles

•Manufacturing

• Human resource Management

• Insurance
 Advantages of
outsourcing

Cost Skilled Time zone

Effective Expertise difference

Increased
Focus on core Distribution of
productivity
competencies risk
and Efficiency

Improving Better
Access to
customer people
world-class
service management solutions
 Disadvantages of
outsourcing

Loss Of Threat to
Hidden Security and
Managerial
Costs Confidentiality
Control

Tied to the
Quality Bad Publicity
Financial Well-
Problems Being of Another and Ill-Will
Company

lose talent
Lack of
inside within Linguistic
customer
your barriers
focus
company
 Types of outsourcing

1) Business process outsourcing (BPO):

BPO is a subset of outsourcing that involves the contracting of the
operations and responsibilities of specific business functions or
processes to a third-party service provider.
• Insurance BPO is the process by
which Insurance companies outsource some back office tasks
like data entry, bookkeeping and accounting to third party
service providers like BPO companies.
• Insurers commonly do this to enable them to keep up with the
increasing paper works and services they are obliged
to process daily.
2. Knowledge process outsourcing (KPO) :
Knowledge process outsourcing (KPO) is the outsourcing of core, information-
related business activities, meaning that knowledge and information-related work is carried
out by workers in a different company or by a subsidiary of the same organization. This
subsidiary may be in the same country or in an offshore location to save costs or other
resources.
Insurance Business Process Outsourcing

Data
Processing
&
Conversion

Policy
Customer Management
Support Services Services

Finance
&
Accounting
Services
 Data Processing & Conversion
 Data Entry From Paperwork into Software
 Data Capturing & Collection
 Conversion of Raw Data into RequiredFormat
 Policy Management Services

New Business Services Policy Endorsement

Policy Creation & Quotes Policy Check & Review
Creation Policy Cancellation &

Policy Binding Reinstatement

Policy Issuance Policy Renewals

 Finance & AccountingServices
 Bank & Credit CardReconciliation
 Accounts Receivable
 Accounts Payable
 Financial Reporting
 Payroll Processing
 Tax Preparation
 Bookkeeping
Customer Support Services

Live Chat/ IMs

Email Support

Phone Support

Direct Client
Conversations
 Investment and related functions

Fund Management Including NAV calculations

Product designing, all actuarial functions and enterprise-

wide risk management
ACTIVITIES
PROHIBITED Decision making in Underwriting and Claims functions
excluding procedural activities related to payment of
FROM Survival Benefit claims in Life Insurance;

OUTSOURCING:
Policyholders Grievances Redressal

Decision to appoint Insurance Agents, Surveyors and

Loss Assessors;

Approving Advertisements
 Today's Insurance companies encounter many
challenges, such as diminishing margins,
increasingly strict compliance requirements,
evolving customer requirements and the fluctuating
economic environment and needs to be flexible. In
such a situation, adopting several outsourcing
methods is the way out for your insurance business
to develop a competitive advantage through
optimized process efficiencies.
CONCLUSION
India continues to remain the world’s favourite
when it comes to outsourcing. It has gained global
confidence with major players such as Cisco, Oracle
and Hewlett-Packard opting for India because they
are confident of gaining access to superior talent,
quality results, fast turnaround times and low costs.