Instead of getting bogged down in claims processing and customer support, with a BPO insurers can focus on what really moves the needle: building rock-solid products, taking care of policyholders, and growing the business.

BPO partners aren’t just extra hands. They bring real expertise. They help insurers handle the nitty-gritty of operations, stay on top of tech trends, meet compliance requirements, and keep pace with sky-high customer expectations. So much so, that outsourcing has become a norm across the entire insurance industry. And this isn’t your old-school outsourcing. These services are built for the speed and complexity of today’s insurance landscape.

The payoff? Insurance companies stay nimble, competitive, and ready to scale. No wonder the insurance BPO market is on track to hit $10.2 billion by 2028. It’s a strategic shift, and it’s delivering real results. Let's go over some key advantages of outsourcing insurance processes.

Cut Costs, Scale Fast: The Power of Business Process Outsourcing

Cost reduction is a huge reason insurers turn to BPO. Why sink time and money into hiring, training, and managing an in-house team when you can outsource and see results right away?

Some insurance wholesalers have slashed costs by 60% after teaming up with BPO partners overseas. With most companies reporting savings in the 30% to 50% range. That kind of financial breathing room is hard to beat.

But the benefits go beyond just cutting costs. BPO makes scaling a breeze. Got a sudden spike in claims? Your BPO team can ramp up fast. No panic hiring and no awkward layoffs when the surge dies down. Just on-demand support, exactly when you need it.

And here’s the kicker: when you hand off routine tasks, your internal team gets freed up to focus on what really matters. Strategy, innovation, and growth.

In short, BPO helps you save more, do more, and grow smarter. Let's dig a little deeper into the cost advantage.

Access to Global Talent Pool at a Fraction of The Cost

There’s a serious talent crunch looming in insurance. The U.S. industry could lose up to 400,000 workers by 2026. That’s not a small gap to fill. Enter BPO.

With business process outsourcing, insurers get instant access to a global pool of skilled professionals without long hiring cycles or talent shortages. Whether you need claims experts, customer service pros, or compliance specialists, BPO connects you to the right people, fast. In a tight labor market, that’s a competitive edge.

The cost of hiring people overseas also gives a key cost advantage. Based on the region, you can almost triple the manpower without increasing costs. This means you save in the short term, and scale rapidly without the worry of overspending. That being said, talent retention is still key here, so you need to offer competitive rates to ensure that top talent sticks with your processes.

Free Up Bandwidth, Boost Efficiency

Outsourcing is about clearing space for your team to focus on what moves the needle. By offloading routine tasks and adding automation into the mix, a BPO provider frees up your internal resources the time to focus on high-impact work.

The payoff?

• Faster policy issuance

• Quicker responses to customers

• Fewer costly errors in day-to-day workflows

And when the pressure’s on, like during a post-storm claims surge, your BPO partner can scale up support in a snap. No scrambling, no bottlenecks, just smooth, reliable operations when you need them most.

Claims Processing That Keeps Customers Happy

Fast, smooth claims handling is the heartbeat of customer satisfaction in insurance, and it’s one of the areas where BPO providers really shine. Whether it’s managing the entire claims process or just handling the heavy lifting, like investigations or final resolutions, BPO teams are built to deliver.

BPOs and their agents are trained to handle insurance related tasks for not just one but several clients. So in many cases you are hiring staff that understands the industry. This means that you have robust process management and access to advanced tech to speed things up.

Outsourcing claims to specialized BPO providers streamlines operations, improves accuracy, and delivers a better experience for customers.

From back-office operations to process automation, BPO services cover a wide range of insurance business needs that are all designed to keep your company efficient, agile, and ahead of the curve.

Always-On Support That Delivers

Today’s policyholders expect help right now, not just during office hours. That’s why many BPO providers offer 24/7 customer support across phone, email, and chat, often in multiple languages. It’s round-the-clock coverage with a focus on high-quality, human-centered interactions.

And it works. One New York insurer saw a major boost in service ratings after switching to BPO-backed support. It’s a simple move with a big impact. It keeps customers happy, supported, and more likely to stick around. This is one of the biggest value proposition, creating a quality customer interaction at all levels at all times.

When it comes to customer experience, outsourcing is a smart way to stand out.

Tech-Powered BPO: Built for Modern Insurance

Today’s BPO solutions are a tech-powered engine driving real transformation. With AI, machine learning, and cloud computing at the core, modern BPO services are all about speed, scalability, and smarter decision-making.

Robotic process automation (RPA) and AI speed up everything from claims to policy management, while cloud platforms keep operations secure, scalable, and accessible, whether your team is remote, hybrid, or global.

And thanks to data analytics, insurers are making sharper, faster, more data-driven calls that boost operational efficiency and improve results across the board.

The real beauty? These tools don’t just save money—they make it easier to adapt, innovate, and stay ahead of change. Add in voice automation tools like Phonely, and you’re looking at a serious edge. Think AI-powered call summaries, sentiment analysis, and real-time insights pulled straight from your customer conversations.

Its that one extra notch of convenience and cost savings on top of a BPO provider. Making that much more headroom, that you, as an insurance company or lead qualifier in this space, would appreciate.

Compliance and Data Security: Non-Negotiables in Insurance BPO

When it comes to insurance outsourcing, data protection and regulatory compliance aren’t just checkboxes, they’re mission-critical. Top BPO providers know this and operate under strict standards like HIPAA, GDPR, and other industry-specific regulations.

They don’t just meet the bar. They often help insurers raise it by assisting with audits, filings, and compliance checks. To keep data squeaky clean, they implement robust validation processes that improve accuracy and help meet regulatory demands.

The best providers go even further:

• Regular security audits

• Ongoing employee training

• Strong encryption practices

• Clear service level agreements (SLAs) that define responsibilities and ensure accountability

In short, partnering with a top-tier BPO is a way to strengthen your compliance game and protect your data like a pro.

Case Study: A US Based BPO saved 60% in Agent Costs And Passed Savings to Insurance Clients with Phonely

A US based contact center started using Phonely to handle calls for insurance processes. Over the course of 6 months, Phonely agents allowed the BPO to offer same level of service while reducing costs by 60%. By reducing reliance on human agents and the associated call center agent turnover, where a single human agent would cost around $18 an hour, with Phonely their total costs were much lower.

Phonely’s AI-powered voice automation to handle customer support and financial ops. The BPO team started using Phonely to automatically summarize client calls, detect customer sentiment in real time, and generate actionable insights that plugged straight into operational reports.

The results?

• Service quality shot up

• Financial reporting got tighter

• Billing and policy concerns were flagged earlier and resolved faster

The bottom line: This BPO saw significant cost savings while building a smarter, more scalable, and more responsive operation that delivered wins for both their team and their policyholders.

Choosing the Right BPO Partner

Picking a BPO partner is a decision that can make or break your efficiency, scalability, and customer experience. Here’s what to keep in mind:

• Clarify what you need.
  Do you need a full-service insurance BPO company or a more niche insurance BPO provider that only offloads some of your business operations? Know the difference. One might offer broad support, the other might specialize in high-impact areas like claims, compliance or qualification.

• Be clear on what you're outsourcing—and why.
  Whether it’s back-office workflows or customer support, define the goals and outcomes you're after.

• Look for industry experience.
  There are several insurance BPO services on the market. Some boast answer rates, some say concurrent calls is their strength, others are AI first. Regardless of who you pick, you want someone who knows insurance inside and out, with happy clients and proven results to back it up.

• Consider a managed services model.
  It’s not just about getting help today. Look for a partner that offers ongoing support, scalability, and long-term collaboration.

• Don’t underestimate specialized expertise.
  The more they understand insurance, the better they’ll be at improving accuracy, efficiency, and customer satisfaction.

• Don’t chase the cheapest option.
  Cost matters, but quality matters more. A cheaper provider that fumbles execution will cost you more in the long run.

• Double down on security and compliance.
  Your partner should be airtight on data protection, regulatory standards, and audit readiness.

Bottom line? The right BPO fit can do more than take work off your plate. It can become a strategic extension of your team.

Future Trends in Insurance BPO

The insurance BPO game is evolving fast. AI, cloud tech, and real-time data are rewriting the rules. Several providers are already using AI tools or building them internally. With the market projected to hit $12 billion by 2034, the insurers leaning into outsourcing are pulling ahead with speed, flexibility, and a serious competitive edge.

Want to take it a step further? Bring Phonely into the mix, and outsource insurance BPO services to Phonely. Our AI-powered voice automation platform turns every customer call into a goldmine of insight, with real-time sentiment tracking, smart summaries, and actionable call data that helps you respond faster and smarter.

Understand your customers. Scale your team. Close more deals.
That’s what Phonely makes possible. To see how communication tools like Phonely transform results, check out these business phone statistics.

Ready to transform your customer conversations?
Visit Phonely.ai and see what AI-powered voice automation can do for your business.