The evolution of business outsourcing in property/casualty insurance was quick and dramatic in the past two decades. But, as we approach the third decade of this century, it’s a new day for the business of insurance — having evolved to operations and services that directly interface with policyholders in everything, from their premiums to their claims experience, and from their abilities to get information to their user experiences. This new day requires new approaches for insurer operations and for partners offering services and support to insurance organizations. Today, those approaches require new reasoning and operating models, spanning the front-, middle-, and back-office, as well as the boardroom.
That Was Then
The traditional business process outsourcing (BPO) model often encompassed relatively monotonous, frequently repetitive tasks, many of which required particular tactical skills but not high degrees of conceptual thinking, strategic aptitude, or even insurance knowledge. Such tasks included but were not limited to:
- data entry
- transaction processing
- billing and invoicing
- purchase order processing
- document scanning and digitization
- print and mail
While those activities are important to enterprise efficiency, they typically fall into the category of effects; that is, they result from and become necessary because of the more strategic operational priorities that keep the organization viable, competitive, and profitable — all the concerns which resonate with the boardrooms of insurance organizations.
This is Now
At the principal insurance operations level, organizations need to continuously improve the conceptual thinking and strategic capacities of their teams and partners — including deep domain expertise and skills, responsiveness and flexibility in policyholder services, and technical and data facilities. They need those attributes to ensure growth, operational control, expense-factor management, governance, and competitive differentiation. They need to stay current with market trends and intelligent automation. In engaging with partners, insurance organizations need to ensure the continuum of insurance operations is bolstered with leading-edge insurtech and data sciences expertise, so every business link is optimized and operating in a matrix of interrelated, intersecting, and interacting processes.
In short, they need SOS (Strategic Operations Support), a natural and necessary transformation of the conventional BPO model the industry relied on in past decades.
SOS ranges from digital enablement to improved customer service, from product development and marketing to distribution, from data-driven decision-making to blockchain and data integrity, from regulatory compliance to cost-control, and much more. And SOS practitioners can support every link in the insurance value chain — product development and management; marketing, sales, and distribution; underwriting and exposure management; policy issuance and service, claims, and finance and accounting.
With SOS, insurers can achieve core objectives near and dear to both the boardroom and to any and all lifecycle operations of the insurance enterprise.
Anthony Iatesta is associate vice president and business development executive at Xceedance, a leader in providing strategic operations support (SOS) to insurance organizations.