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BPO Basics

Advisory firm Celent recently published a report on insurance business process outsourcing trends.

By Eric Gilkey | Updated on April 30, 2009
Mike Fitzgerald

Advisory firm Celent recently published a report on insurance business process outsourcing trends, and noted that parts of the claim process are being commonly outsourced by P&C insurance providers. To find out why, Claims spoke with Mike Fitzgerald, senior analyst in Celent’s insurance practice and the author of the report. His background includes research that has focused on, among other things, business processes and operations.

What does business process outsourcing mean and why is it getting the attention of insurers?

Business process outsourcing involves contracting with a third party to perform tasks related to a specific function. Cost savings is the traditional motivation for outsourcing a process. Savings can range from 20-40 percent. In addition to cost reduction, quality can also improve. Often, a vendor can focus and perfect a process to a level that a single insurer is not able.

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