Many of the true newcomers to insurance business process outsourcing (BPO) may be life, annuity and health insurers.
Analysts at Celent, Boston, make that prediction in a new North America insurance BPO market review.
North American insurers will spend about $2.3 billion on outsourcing this year, and that figure could grow 10% per year between now and 1016, the analysts say.
Property-casualty insurers and multinational insurers may stick with building on existing outsourcing programs, but life, annuity and health carriers may make genuine “new/new” BPO deals, in an effort to hold down the cost of administering closed books of business, the analysts say.
The analysts also expect to see health insurers increase use of outsourcing in an effort to comply with the new Patient Protection and Affordable Care Act of 2010 (PPACA) limits on administrative costs.
- Allison Bell