Outsourcing procedures for handling insurance claims

The insurance industry’s processes for handling claims are demanding and can take an extended time to process from the moment of initiation until a decision being made. In fact, it can take about 1.5 months for claims for life insurance to be considered, 1.6 months for a claims for trauma insurance as well as 1.5 months to allow an income security claim to process. Insurance companies must always be seeking ways to speed up these processing periods to enhance the satisfaction of their customers and decrease cost.

An answer is outsourcing. Through this piece, we’ll review the current state the insurance market, what is outsourced insurance claims handling and the reason you should outsource your insurance claims handling processes and what claims-handling tasks can be outsourced.

The state of affairs in the market for insurance

The insurance market worldwide is expected to expand by a compound annual growth rates (CAGR) of 6percent annually from 2021–2025, and reach U.S. $6.4 trillion by 2025. In a report curated by Deloitte the company, they concluded “that despite ongoing COVID-19 worries that insurers generally anticipate faster growth by 2022, even though non-pandemic problems with regard to regulatory, talent, sustainability and changing consumer preferences could cause challenges to the speed of growth.” One key lesson from this study is how many things will be contingent on how insurance companies manage their investments, especially on the cutting-edge technologies and individuals.

This boils down to their ability to manage automation and human touch customer service, and also implement flexible work models such as outsourcing. With the need of insurance projected to continue increasing across the globe, so will the need for better process for handling claims. These flexible models of working Deloitte mentions can be directly utilized to manage insurance claims. In fact outsourcing is a perfect business model for insurance claim handling.

What is outsourced insurance claims managing?

Processing and handling of claims is a broad area of insurance operations that involves the examination, investigation, adjustment and remittance of claims. Full-cycle claims processing is not always done by one person. It is possible to have a separate group responsible for the review and investigation portion as well as another team for adjustment and the remittance. In most cases, this is split between junior and senior claims processors respectively. Therefore, the handling of insurance claims is most effective working in teams, reporting directly to a knowledgeable team leader for guidance and escalation.

Outsourced insurance claims processing is an instance of a company partnering with an external third party outside of the home. This can be overseas or even in the same nation or just across the street. If outsourcing happens in another country, it is referred to as offshoring. The outsourcing of the insurance claims management process can involve sending work externally like handling and lodging claims as well as managing data, determining liability, and coordinating with other providers.

Why would you outsource your insurance claim handling?

Insurance companies are always looking for ways to improve their overall performance and gain a competitive edge. In fact, having dedicated insurance claims processing teams is one approach to begin. These teams have the knowledge with the necessary knowledge and expertise to handle various insurance claims. Here are some reasons why outsourcing could benefit your insurance claims process.

Cost reduction

Processing claims involves a large investment in human resources and infrastructure. A sudden increase in the number of insurance claims caused by natural disasters or global pandemics may cause sudden recruitment campaigns and these costs can quickly add up. Then there’s the amount of time and money it takes to handle claims and meet regulations for compliance. This could be better spent in-house more, like establishing marketing strategies and maintaining key stakeholder relations.

The outsourcing of your insurance claims processing tasks can save your business up to 70% on labor costs alone.

Enhance customer experience

Consumers today expect speedy and swift results and at the same time, feeling cared for and supported during the claim process. Claim settlements typically occur as a result of an event that is stressful for customers. If you want to retain customers long-term, you need to make sure the entire claims process is stress-free and simple for them.

Insurance outsourcing providers meet the highest customer service standards for processing claims for insurance and providing a great customer experience. It is recommended to connect with your outsourcing service provider to define key performance indicators (KPIs) and communicate expectations regarding customer service.

Acces to InsurTech

Professional outsourcing companies are aware of the cutting-edge technologies that insurance companies utilize for claims processing. Through working with these outside providers that are knowledgeable of InsurTech, you can move the claims handling process into a a more efficient and digitally-driven environment.

Digital claims technology can bring about an average of 25–30 per cent reduction in costs for claims and raise customer satisfaction scores by 20 percent. Access to these technology-based insurance platforms will eventually result in an impact on the various areas of your business that range from cost to customer service.

24/7 claims support

Unpredictability is part of nature. There’s no way of knowing what might happen when your customer leaves their home each day. They might be involved in an auto accident or injure themselves walking down the stairs. Since you as an insurance firm are not able to anticipate the time when your clients are likely to require claims assistance outsourcing companies give you the possibility of having a 24-hour claims management teams.

That way, your customers will have peace of mind knowing that should anything happen to them, whichever time it occurs, they will be taken care of. This will improve your customers’ experience and increase your competitive edge. The hiring of 24/7 insurance claims processing teams from a lower-cost economy, such as the Philippines typically, is less expensive than if done so locally.

Scalability for businesses

Offshoring your insurance claims processing tasks can help boost profits and boost your business for growth. With the added capacities offshore, you’ll find that your onshore team will be able to tackle more tasks and build your business sustainable.

Knowing the insurance claims tasks are in good hands, allows your local staff the chance to focus on strategies that will help grow the number of relationships with customers.

Increase flexibility and efficiency

Outsourcing will let you rapidly and easily expand your team according to business requirements. If a surge in claims for insurance is observed you are able to easily increase the size of your staff offshore. Outsourcing lets you add or remove claims processors in accordance with the needs of the claims market.

What tasks can be outsourced?

Insurance claims processing duties and tasks that you could outsource include, but aren’t limited to:

Reviewing claim submissions


Inquiring and verifying information


Correspondence with insurance agents and beneficiaries


Preparing claim forms


Record management and maintenance insurance policies and claims in databases


Calculating the policy’s coverage and pay-out claim amounts.

These claims processing jobs are all very repetitive and require focus to detail. This is why they are ideal for outsourcing.

What’s next?

Technology advancements, data-driven processes and increasing customer demand have transformed all industries, however with regard to cybersecurity, insurance companies are “behind” when compared to banking and some other financial industries. There’s never been better time for insurance executives to not just be aware of the current challenges in their business, but also embrace simple, intelligent as well as cost-effective solutions to address them like outsourcing.