Outsourcing in all forms has emerged as a dynamic evolution in business processes. It has affected the insurance industry to a great extent; here we will be discussing how outsourcing became a crucial mode of business solutions for independent brokers. BPO or business process outsourcing services as we come to know of it in the insurance industry began to be leveraged earlier by predominantly large institutions. Small and Midsized companies were unaware of its existence for quite some time and later on were ignorant of the utility and advantages of this process. They could not make the best use of the technology available or efficiently utilize the process to their advantage.
For the major part, the larger corporations made use of the outsourcing solution as a means for wage arbitration or for cost cutting and expenditure management via lowering the labor costs. However, with the progress of time outsourcing became a viable solution for the rest of the industry, the emerging and evolving market challenges shifted the focus from wage arbitration to other core actions and made it a secondary benefit of outsourcing.
What became the prime motive or edge of this new technology based process was that it solved staffing issues. To this day, most companies face significant amount of challenges when it comes to attracting new talent and retaining potential talent. This is a crucial issue affecting organizations from the 80’s and the 90’s. According to a report, the average age of an insurance agent in the U.S in the year 2015 was 60. This focuses to the lack of new talent being introduced into the insurance industry over the last couple of decades. As this workforce ages it struggles to bring in new talent to the industry. In the events of low national inflation, these issues can lead to acute pressure on insurance organizations.
We will share more information on how the young talent perceives the insurance industry in our next segment.