Outsourcing is on the rise in insurance as newer entrants disrupt the industry — and established insurers are fighting back. Legacy insurers, new economy companies, and other brands entering the insurance market need the deep expertise, efficiency, and scalability insurance outsourcers offer. 

Both types are using insurance process outsourcing to overcome debilitating technical debt, modernize how they handle claims, and reduce CX and operations costs. For many insurers, minimizing the combined ratio by reducing expenses is a powerful approach.

In other words, outsourcing has become a competitive edge in a world of lightning-fast change and sky-high customer expectations.

In this article, we’ll cover: 

  • Why outsourcing services are in higher demand
  • Why insurance business process outsourcing is important
  • Key trends in insurance outsourcing 
  • What outsourcing companies can do for your business


Demand for outsourced insurance services is on the rise as insurers try to modernize the customer experience, cope with technology that wasn’t designed for a world of Amazon-like experiences, fend off new competition, and find new ways to free up capital. 

And it’s not just keeping up with new competitive threats and rising expectations. They need to find ways to reduce expenses as inflation drives up the cost of claims and wages, and fraudulent claims are on the rise. 

Meanwhile, most established insurers have a lot of technical debt that makes it hard to meet customer expectations for easy 24/7 digital access. 

Simply put, outsourcing insurance services helps companies reduce operational costs via:

  • Economies of scale
  • A laser focus on operational efficiency 
  • Access to lower-cost talent pools in other regions 
  • Shortcuts — they’ve tested new approaches on other clients
  • Expertise in using technology to drive efficiency 
  • Behavioral science expertise to nudge customers to make decisions that reduce the cost of claims and support

Efficiency is the traditional reason companies outsource. As the markets — and particularly technology — grow more complex, ambitious companies across every industry are looking to offload any function outside their core competencies. 

Sure, insurance process outsourcers can hire and manage staff at a lower cost for  labor-intensive tasks like customer support, claims processing, and fraud detection, but the good ones also have more automation expertise to do these things at an even lower cost. The better outsourcers have significant customer experience expertise and can advise and execute on strategies for creating digital experiences (like self-serve and AI chatbots) that satisfy customers while significantly reducing the cost of support. 

And the very best can help you design workflows and experiences that reduce the cost of your claims via improved communications. Think: getting in touch with a third party in an auto accident so you can nudge them toward your own repair shop or a less expensive rental car. That requires speed, both in how fast you learn about a new claim and how fast you can reach out to the parties involved. 

In addition, many insurers outsource for scalability — either when their customer base is growing, they’re going after new market types like B2B, or they’re entering regions with new compliance needs or languages. 

Startups are using insurance outsourcing services to take on incumbents

Startup insurers as well as large companies are getting into the insurance game. Think digital-only brands like Lemonade and travel brands edging out insurers to offer their own travel insurance. 

These companies don’t have the in-house infrastructure to grow quickly, but it doesn’t matter. They can tap big-time expertise and economies of scale — and move very quickly — by tapping insurance services outsourcing providers with deep expertise. 

Insurance services for outsourcing often include whole functions: 

  • Claims
  • Customer support
  • Sales and renewals
  • Marketing 
  • Compliance (like KYC checks)
  • Underwriting support and management
  • Fraud monitoring

Why is insurance business process outsourcing important? 

Insurance business process outsourcing is important because it helps insurers protect their margins and innovate faster (and with lower risk) in hugely competitive landscapes. In addition, customer experience in the insurance agency is changing rapidly, and outsourcing allows insurers to keep up. 

Insurance outsourcing companies allow established players to transcend legacy infrastructure to move quickly. It also gives them the agility to experiment in new markets faster and with lower risk than building in-house capabilities. For instance, insurers can trial a product in a new market without having to set up a contact center and hire staff or build a new compliance team. They can outsource those services with companies (like Concentrix + Webhelp) that already have infrastructure and expertise in those regions. 

And what are the key insurance outsourcing trends shaping the industry?

The main outsourcing trends in the insurance industry include digitization, margin pressures, and the rise of embedded insurance. 


Most established insurers are looking to update both internal processes and how they support their customers. The majority are saddled with legacy systems and technical debt, which makes it hard to modernize. Many are using outsourcers to fill the gap. They can hand over functions like claims or customer support to partners who are experienced in providing outstanding digital and human customer experiences in these areas. 

Margin pressures

Fast inflation can erode margins when insurers sell policies that become more expensive to fulfill than their underwriting formulas predicted. For instance, an auto insurance policy becomes less profitable because the cost of replacements and repairs rises more than predicted in the policy period. New risks like higher repair costs for electric vehicles also present challenges. In addition, because of new laws in Europe and digital transparency, consumers can price-shop more easily — creating more price sensitivity and threatening insurers’ ability to retain customers. 

Outsourcing trends are often driven by margin pressures. Many companies are looking to provide their services more cost-effectively, and they can accomplish this by outsourcing non-core, high-volume functions to outsourcing partners who do it just as well (and increasingly better as customer experience grows more complex and specialized) at a lower cost. 

Embedded insurance

Consumer insurance brands have hit on a motherlode of new opportunity: the ability to sell microdoses of insurance bundled with external products and services. Examples are popping up everywhere: you can insure concert tickets against the risk of getting sick and being unable to attend a show. AirBnB hosts can add supplemental insurance to cover issues that homeowners insurance might not have. Consumers can buy extended coverage plans for just about any product they purchase. 

While this is bringing in new customers, the cost of customer acquisition can be high — meaning you might not earn profit unless you can convert those new customers into long-term ones by cross-selling other products and delivering via cost-effectively via digital channels.

One of the big trends in the insurance industry is figuring out how to support embedded insurance profitably via outsourcing. This may mean managing the complex requirements for partnering with the sellers, supporting customer service and claims via digital channels, and upselling in a compliant way through tailored communications and offers.   

What can insurance outsourcing companies do for your business?

Insurance outsourcing companies can help your business manage customer support and onboarding, claims, compliance, sales, collections and payments, IT, and other functions. 

Many insurers turn to insurance outsourcing service providers to manage customer support or the full lifecycle. 

A strategic partner like Concentrix + Webhelp goes further, offering transformational insurance outsourcing solutions like customer journey design, intelligent automation, and operations modernization. 

Insurance operations outsourcing

You can find outsourcing solutions for a wide variety of operational needs, such as claims processing, collections and payments, and even underwriting. The best providers use analytics to identify inefficiencies and continually improve upon how efficiently they deliver (and charge for) your operations. 

Claims modernization and outsourcing offers an enormous opportunity to improve operations — not just to save money but to process faster, deliver a better customer experience, and reduce fraud through effective use of analytics and artificial intelligence. 

Concentrix + Webhelp offers: 

Insurance IT outsourcing

Many insurers — especially up-and-coming ones — outsource technical support for customers as well as internal staff. 

Outsourcing IT can be an effective way to reduce the cost of technical support and increase the quality. 

Concentrix + Webhelp’s technical outsourcing services include:

  • Multilingual technical support for customer and clients
  • Tier 2 & 3 support for Product Managers, IT Developers, and Quality Managers

We offer a variety of support channels: 

  • Voice
  • Email
  • Live chat 
  • Auto-chat 

When looking for an insurance outsourcing company, you should consider: 

  • How flexible they are — do they look to get to the right outcome for a customer, even if it’s outside the contract? 
  • Are they able to balance driving quality and compliance while reducing risk with lowering your costs? 
  • Do they help you think through and improve outcomes beyond reducing the cost of operations? 
  • Are they content with the status quo or do they strive for continual improvement? 
  • Do they have experience in your sector and every place you want to expand?
  • How do they balance technology (automation, self-service, AI) and human delivery? 
  • What customer experience expertise do they bring to the table? 

Concentrix + Webhelp offers insurance industry outsourcing services that help insurers large and small grow revenue and margins. Are you ready to find out how we can help you streamline operations and deliver outstanding customer experiences? Talk to an expert.

See how updated CX directly impacts your combined operating ratio. Read the eBook: Reengineering insurance customer experience for profit and liquidity.