Business Writer Chris Pryer reported some interesting insights into why insurers choose to outsource. He says, “… insurance companies need to concentrate on their core competencies: writing new business, merger and acquisitions, etc. Outsourcing support functions allows them to concentrate their focus on activities that contribute to growth.”

Steve Holcomb, president of Trumbull Services, highlights four distinct groups of insurance processes that are being outsourced:

• Field-based services. Services performed over a large geographical area, including loss prevention and premium auditing.
• Policy administration and billing. This is a third alternative to the buy- versus-build question. It also elevates the process to a best-practice level in all areas: technology, customer service, insurance expertise and transaction processing.
• Financial recoveries. This includes subrogation and premium (and overdue premium) collection.
• Data management (and analysis) and statutory and regulatory reporting.

Pryer concludes, “…insurance companies will continue to adopt more relevant business models. (One of the most obvious, made possible by the Internet, is the virtual insurance company.) Fiercer competition, rapidly evolving technology, deregulation and the resultant spawning of more innovative insurance products, terrorism, and a volatile economic landscape all demand business solutions that surpass the capabilities of in-house staff. Insurance companies that are willing to take stock of their inadequacies, accurately assess their needs, and consult with outsourcing experts to ensure partnering with the right provider will be in the best position to not only survive, but prosper…”