Allianz’s recent Global Insurance Report highlighted why many insurers are preparing for busy times ahead. Amongst a myriad of facts, it found the global insurance industry grew by an estimated 7.5% in 2023, the fastest growth since the pre-GFC days of 2006. Further expansion is also on the radar, with forecasted growth of 5.5% annually over the next decade.
Such findings bode well for the future, but insurers will need to overcome many present-day challenges to capitalise on such opportunities. Talent shortages, rising costs, and an ever-evolving regulatory environment are just a few of the hurdles that firms find themselves navigating daily.
It should come as no surprise then that an increasing number of insurers are embracing the power of outsourcing to ease the load. Partnering with an expert in claims and risk management services allows people and companies to receive vital support in preventing, managing and overcoming the impact of risk. Be it general insurance, workers’ compensation or injury management solutions, there are countless reasons to consider an outsourcing strategy.
Access to skilled talent – quality claims management requires a unique mix of technical skills and highly focused customer service, but overworked staff often find themselves struggling to get the balance right. Empathy is key and TPAs invest heavily in employing team members who understand the nuances of individual cases and can address traumatised customers with sensitivity. Their ability to navigate complex regulatory requirements while prioritising customer welfare helps build a culture of trust and transparency within an organisation.
Enhanced scalability – the insurance world is unpredictable and the need for additional resources at short notice is a recurring reality. Be it on a temporary or permanent basis, outsourcing allows insurers to efficiently and seamlessly increase or decrease staff numbers and, in turn, significantly enhance the claims management process. Focused and dedicated third parties can work alongside clients to ensure tight complaint deadlines are met and customer frustrations are minimised.
Improved outcomes – claims management partners have a vested interest in driving superior outcomes on dimensions such as cost, duration, litigation rate and reserving. Before entering a partnership, insurers can request access to data for analysis and interpretation and ultimately select a team that best demonstrates their focus and capabilities.
Security and compliance – you only need skim media headlines to know cyber threats and data breaches are on the rise, with our 2024 Claims Insights global survey revealing 65% of Australian insurers consider cyber security and data breach regulations their top compliance and regulatory challenge. Many firms are easing such concerns by outsourcing claims management to partners that boast robust data and cyber security initiatives and, like Gallagher Bassett, are ISO27001 certified organisations. As our survey showed, 53% of insurers plan to hire compliance consultants or claims and risk management experts to enhance compliance measures and 43% are exploring partnerships with claims management providers.
Cost benefits – claims management requires major investment in workforce capacity and infrastructure before even factoring in unexpected peaks in claims that result in recruitment drives. Claims management partners can often provide end-to-end solutions at a lower cost and higher quality due to their ability to focus on employee development and operate at a larger scale than many in-house claim organisations.
Technology and Innovation Advantages: Costs such as continuing investment in systems and innovation, are also considerable factors with today’s constantly evolving technological landscape. Having a partner who is at the forefront of innovation and development in the industry not only allows you to stay ahead of the cut, but also allows you to do so without having to invest your own resources. With the right partner, comes access to the best technology.
Choosing to outsource should be grounded in a clear comparison of your internal costs versus those of an external partner. After evaluating the numbers, the crucial step is selecting the right partner for your business. When making this pivotal decision, ensure your TPA can deliver on the six key benefits of outsourcing and beyond, allowing your organisation to maximise the efficiency of your claims management, the minimisation of risk, and to significantly enhance your bottom line.
Take action now to secure a partnership that drives your business forward.
Contact us to learn how Gallagher Bassett can support you.
