The rising cost of operations, high number of claims, and severe lack of qualified adjusters are placing an enormous burden on the insurance companies of today. As customer demands shift towards quick and digital solutions, legacy systems are struggling to cope.

The major players in the insurance industry are winning claims through collaboration with third-party experts to increase FNOL intake, reduce processing time, and integrate AI processes. Insurance companies can then focus on complex claim management and growing their businesses because of the transfer of administrative work to professional experts.

We at VLBPO understand the needs of insurance brokers, insurers, and Third Party Administrators (TPAs) when faced with these issues. Using our long-time experience working in this highly complex industry environment, this book analyzes the reasons behind this trend and how it may be implemented by your company.

What Is an Insurance Call Center?

An insurance call center is a place where all communications and FNOL will be handled, and it is dedicated and outsourced to manage all such processes. Professional people who know all about insurance policies and procedures work here.

Unlike the regular call center, an efficient claims department must operate in compliance, with empathy, and with accurate technical knowledge. In the case where the policyholder experiences loss, whether minor or major, the initial communication determines how the whole claims process will be handled.

The VLBPO teams perceive this interaction as the true moment of truth. In today’s insurance contact center, it is the combination of human empathy with state-of-the-art CRM solutions that allows for precise record keeping, fast assignment of adjusters, and support of the insured during a difficult time.

The Current State of Insurance Claims Management

At present, the insurance claim world faces an increasing prevalence of severe claims, an escalation in litigation cases, and a shortage of talent in the field. The National Association of Insurance Commissioners (NAIC) points out that the P&C lines have been showing frequencies and severities that make insurers more efficient in their operations.

Insurance company proprietors are facing an unenviable situation. Retaining the experience of claims adjusters in their companies is becoming exceedingly difficult. Retirement waves have resulted in a reduction of their numbers, and it will take many years before the lost knowledge is regained through training. Furthermore, there is an increase in overhead expenses in crucial centers for insurance in locations such as New York, Chicago, and Hartford.

Policyholders are looking for an Amazon-type processing speed with respect to their claims. Research conducted suggests that customers become unsatisfied very quickly if there is no response to their claims and processing thereof within the first 24 hours. Insurance carriers find themselves struggling with bridging this disparity.

Why Carriers Are Shifting to Outsourced Insurance Experts

In order to remain profitable and improve the experience for customers, the airlines are moving away from being completely internally-focused. Through an outsourced third party, they turn their fixed costs into variable costs based upon demand.

1. Unmatched Scalability During Surges

Volumes do not remain constant. Any large-scale weather disaster in Tampa or Dallas will flood the carrier with thousands of claims in just a couple of hours. It is very costly to run an internal customer service center, which does not meet expectations during both slack and emergency periods. With outsourcing, insurers are able to quickly scale up staffing to avoid any long hold times for the insureds.

2. Cost Containment Without Sacrificing Quality

Investing in the building of infrastructure costs significant amounts of real estate, labor force, salaries, and technological advances. Cooperation with a specialized insurance business process outsourcing firm will allow operations managers to save up to 40% on their expenses. These resources can be directed to various activities like rapid business expansion or modernization of policy administration systems.

To learn more about the underlying factors that have influenced this transformation, be sure to check out a comprehensive analysis on why industry leaders are outsourcing call centers right now.

3. Access to Advanced Technology

TPAs and other medium-sized insurers continue to use outdated technology. High-end outsourcing companies have their own tech stack to provide AI-powered claims sorting, workflow automation, and advanced communication tools. This allows them to instantly update the processes without lengthy implementation periods of several years.

4. Continuous 24/7 Availability

An accident does not operate within the framework of a 9-to-5 schedule. Policyholders need immediate attention regardless of whether it’s Sunday morning at 2:00 AM or an accident occurring during a holiday period. Outsourced assistance services provide round-the-clock availability to ensure immediate FNOL registration.

Core Functions Managed by an Insurance BPO

Outsourcing doesn’t mean handing over everything blindly. It is only the smartest organizations that combine both models, performing difficult case-by-case adjudications internally while outsourcing highly repetitive and volume-heavy procedures to professional third parties such as VLBPO.

First Notice of Loss (FNOL) and Claims Intake

The FNOL stage is one of the most crucial points in the claims management process. The proper capture of data at this point will ensure that any subsequent delays will not occur, reduce the risk of fraud, and also result in faster settlement. Outsourcing claims intake teams are taught to:

• Gather exact facts about incidents.
• Check active policies for coverage and deductibles.
• Start assignment to field adjusters or preferred repair facilities.
• Offer sympathetic support to stressed-out policyholders.

Policy Administration and Policyholder Support

Apart from claim management, the insurance business process outsourcing company manages the day-to-day administrative activities that bog down the internal department. This comprises endorsement of policies, insurance certificate issuance, bill inquiries, premium collection calls, and other routine activities. Insurance companies are able to focus their licensed agents on making new sales and up-selling by handing over customer support.

Catastrophe (CAT) Claims Handling

If a hurricane “clotheslines” the coast or fires rage in Phoenix, the sudden influx of claim activity could easily crush an ill-prepared insurer. Our catastrophe response experts have a plan for just such events and maintain specialized catastrophe outsourcing resources that can be deployed immediately to handle such stressful situations.

In-House vs. Outsourced Claims Processing

In evaluating insurance call center services, companies must go beyond mere hourly cost and examine the complete value added through the entire life cycle of a claim. This is an objective comparison based on our experience with operational models in the industry:

How AI and Automation Are Changing Insurance Outsourcing

AI is revolutionizing how claims are managed. In a recent report by Deloitte, the usage of AI in the insurance industry is transitioning from theory to practice. However, technology is not sufficient in solving all scenarios. The most effective strategy combines the strengths of AI and human expertise. This is precisely the method adopted at VLBPO.

Intelligent Claims Triage

The AI system will automatically process the information provided during FNOL in order to determine the level of the claim. The less complicated claim, for example, a claim of small auto glass damage, will be automatically processed, whereas any complicated bodily injury claim will be referred to the higher-level adjuster at once.

Fraud Detection

In outsourced teams, the intake process involves the use of an advanced analytics system, which will help identify inconsistencies as the process is ongoing. If there is an inconsistency between the insured’s information and the historical weather or claim information, then questions will be generated for the intake specialist.

Omnichannel Customer Service

Today’s policyholders prefer to communicate through texting, web chat, emails, and telephone calls. The outsourced insurance call center provides a comprehensive platform to combine all these media. When a client starts filing a claim through the mobile application and then calls to inquire about it, our team can access the entire history of that conversation without the need for the client to repeat the same thing twice.

Implementing an Outsourcing Strategy for Your Insurance Operations

To successfully outsource the claims support processes, you have to plan properly. Here are several crucial aspects to consider in advance in order to ensure a positive outcome. 

Step-by-Step Implementation Framework

1. Audit Your Current Workflows: Start by mapping your current claims process and identifying where the gaps occur, including AHT and places with the most errors made.
2. Define Clear KPIs and SLAs: Define how success will be measured. The most typical metrics include ASA, FCR, and FNOL accuracy.
3. Ensure Regulatory Compliance: Your partner will need to follow HIPAA (in case of medical/life claims), PCI-DSS (billing-related tasks), and regulations set by the Department of Insurance in the states where you operate.
4. Develop a Knowledge Base: Develop an extensive knowledge base in the form of SOPs that would reflect your carrier’s guidelines and the tone of your brand.
5. Pilot the Program: Start by outsourcing some specific part of your process, for example, after-hours FNOL or a certain regional portfolio of customers.

Choosing the Right Partner for Insurance Call Center Services

Choosing an outsourcing partner is a crucial business choice. Going for a generic BPO company often results in compliance problems and disgruntled policyholders. During the partner interview process, the customer experience executives should look for:

• Industry Specificity: Do they understand the difference between collision and comprehensive insurance coverages? Do they easily read a declaration page?
• Security of Data: What are their physical and network security strategies? Ask them for SOC 2 Type II certification reports.
• Methods of Training: How do they train agents to be empathetic? Handling an insurance claim about a burned-down home requires a tone of voice entirely unlike debugging software.

Please take a look at our specialized customer care outsourcing services and find out how outsourcing partners will help to establish these systems for your business.

Ending Remarks

There is a revolution taking place in the world of insurance. Insurance companies cannot continue to rely on old-school, in-house methods in order to handle increasing numbers of claims that come with greater complications. The result of offloading administrative and FNOL processes to specialized outsourcing partners is lower expenses, faster claims management cycles, and a better experience for the insured.

Outsourcing strategy does not mean that you are hiring people to replace you. It means that your adjusters will have more time for doing their best work – investigating losses, minimizing risks, and increasing profits.

If your company has problems with scaling operations or faces huge overhead costs, then it is the right time to think about special cooperation.

Frequently Asked Questions

What types of insurance companies benefit from outsourcing?

All property and casualty (P&C) insurance companies, life insurance companies, health insurance companies, MGA’s, and TPA’s have much to gain through outsourcing as well. Outsourcing will provide scalability, reduce costs, and allow internal staff to focus on risk assessment and complex claim adjudication.

How does an outsourced team handle First Notice of Loss (FNOL)?

An external team works on FNOL 24/7 using any medium – via telephone, live chat, or email. The team members gather accurate information about the incident, validate policy coverage, feed the data directly into the claims management system of the insurance company, and initiate further processes.

Is policyholder data secure with an outsourced call center?

Of course, provided that you choose a trustworthy vendor. Top-notch insurance BPOs follow high security norms and are compliant with SOC 2 Type II, have advanced data encryption methods, safe VPNs, and stringent physical controls to ensure the protection of their valuable PII data.

Can an insurance BPO handle catastrophe (CAT) claims?

Absolutely. Dedicated insurance BPOs work with a workforce model that is scalable in case of a disaster. The use of a backup workforce helps ensure that the influx of calls is attended to without burdening the insurance company’s own personnel.

How do we maintain our brand voice when outsourcing?

Sustaining the brand voice relies heavily on good cooperation, even at the stage of onboarding. The carriers need to provide comprehensive brand guides, scripts, and empathy modules. The partner would integrate all these in their SOPs and conduct a stringent monitoring of calls.

What is the ROI of outsourcing insurance customer service?

Outsourcing is associated with ROI because it reduces operational costs, which are estimated at 30-40%, and eliminates costs related to hiring and training of employees in entry-level positions. In addition, it improves customer retention due to quick response and 24/7 availability.