Property & Casualty (P&C) Insurance BPS State of the Market Report 2020: Deconstructing the Present and Expected Future of Sourcing Strategies

22 Jun 2020
by Somya Bhadola, Harsh Kapoor

In 2019, when leading economies were experiencing difficulties – the US involved in a trade war with China and the UK facing uncertainty over Brexit – P&C insurers had not yet felt the burden on their income statements. However, COVID-19 exacerbated the crisis and dented almost all industry segments, including P&C insurers. Worse still, the pandemic was a double whammy for P&C insurers, which derive their top line from not only individual customers, but also commercial enterprises.

For P&C insurers, the year preceding the COVID-19 period was marked by rising surplus, reducing claims pressures, and increasing investment income. This led to most of the leading players investing in portfolio expansion, digital-led partnerships / acquisitions / in-house investments, underwriting discipline, and data-led innovation. All these measures were geared toward winning on customer experience. Not surprisingly, insurers’ partnerships with their service providers also pivoted toward the latter’s ability to deliver business outcomes such as increase in customer satisfaction than just cost/inefficiency take-outs.

With the extreme shifts in business environment due to COVID-19, both for insurers as well as their service partners, many struggled for even basic operational continuity, at least in the immediate term. While the industry has now largely adjusted to the vagaries of the changed operating environment, these changes appear to be more permanent than expected. The P&C insurance BPS market is expected to transition through significant operating model and engagement structure changes. Thus, it is imperative for service providers to understand the developments in insurers’ sourcing strategies, objectives, and the implications on future sourcing requirements – with a recession looming ahead.

Scope and methodology

Industry: industry-specific P&C insurance BPS, including personal, commercial, and specialty lines

Geography: global

Information sources: proprietary database of 400+ P&C insurance BPS contracts (updated annually); coverage of 20+ P&C insurance BP service providers, including Accenture, Atos Syntel, Capita, Cogneesol, Cognizant, Conduent, Covenir, DXC Technology, Exela Technologies, EXL, Genpact, Infosys, Innovation Group, Mphasis, MFX, Patra Corp, ResourcePro, Sutherland, TCS, Xceedance, and WNS

Contents

This report covers trends and discussion themes in the P&C insurance BPS industry, under four sections:

  • Review of 2019 and COVID-19-related market trends in the P&C insurance industry
  • Market adoption trends in P&C insurance BPS
  • Developments in insurers’ sourcing strategies and expected impact of COVID-19 on the future
  • Key action items for service providers

Membership(s)

Insurance - Business Process Outsourcing (BPO)