Introduction

The global insurance BPO market has grown steadily over the last three years to reach ~US$2.7 billion. While L&P segment accounts for the larger share of the market, P&C segment is growing at a faster pace, with more new signings over the last two years. We expect the market to grow at a CAGR of 16 to 18% in the next two years driven by growth in adoption within the small- and mid-sized buyer segments and inclusion of complex processes.

A higher proportion of contracts in 2013 were extensions or renewals as compared to new contracts, signaling growing maturity of the insurance BPO market. Service providers, therefore, are looking beyond simpler processes, such as claims processing and policy administration, and are entering niche segments, such as specialty insurance and reinsurance, to define new avenues for growth.

Scope of analysis

• Proprietary database of about 300 insurance BPO contracts (updated annually)
• Coverage across 19 insurance BPO service providers including Cognizant, CSC, Dell, EXL, Genpact, HCL, IGATE, Infosys, MphasiS, NIIT, Polaris, Serco, Sutherland Global Services, Syntel, TCS, Tech Mahindra, Wipro, WNS, and Xchanging

Content

This report will assist key stakeholders (buyers, service providers, and technology providers) to understand the changing dynamics of the insurance BPO market and identify the upcoming trends. It provides comprehensive coverage of the insurance BPO market, including adoption trends across geographies and insurance segments, key solution characteristics, service provider landscape, and areas of service investments. Some of the findings in this report are:

• While the United States is the leading adopter of insurance BPO with over 60% of the contracts, the United Kingdom is the largest insurance BPO market accounting for 47% of the share
• Large buyers dominate the insurance BPO market, but activity in large insurance companies is plateauing. Small buyers in L&P and mid-sized buyers in P&C are driving growth
• Key factors driving the growth of insurance BPO are macroeconomic pressures, regulatory changes, rising incidences of fraud, and rise of digital consumers
• L&P segment continues to witness high adoption of platform solutions, particularly within small- and mid-sized buyer segments
• Degree of onshoring within L&P segment has increased due to stringent data privacy laws, especially for contracts signed within the United Kingdom. The offshoring level varies across the value chain and is led by policy administration
• P&C segment has always seen high adoption of judgment-intensive processes, a trend that has further increased in the last two years. Underwriting support led adoption, followed by analytics support
• With increasing buyer maturity, adoption of output- and outcome-based pricing has increased over the last two years in the P&C insurance segment
• TCS, Xchanging, and EXL are the biggest insurance BPO service providers and account for ~56% of the market share by revenue