Should brokers outsource their insurance systems?
As I’m sure you will know, ‘outsourcing’ is the process of delegating one or more business processes to third parties or external agencies. When outsourcing crosses national boundaries and is managed by companies based in other countries, outsourcing becomes ‘offshoring’.
Outsourcing offers a range of potential benefits, from lower staff costs and improved quality, through to access to the latest product and service innovations.
Can you beat the recession by outsourcing?
While outsourcing is not a panacea for the economic downturn, it could certainly help. It’s safe to assume that almost every broker has been focused on ways to reduce costs, particularly over the last few years, and outsourcing certain processes and functions has undoubtedly been considered if not actioned.
There is a strong business case for outsourcing and many brokers have explored the possibilities already. Often insurance brokers will, at the minimum, use an external compliance consultant to avoid the costs of employing a full-time regulatory expert.
What can you outsource?
Of course there are other functions that could be outsourced as well including payroll, employee benefits, accounting, tax management, invoicing and marketing. We will cover the topic of outsourced marketing in our next post.
In the same vein, many brokers choose to outsource their insurance systems to companies like Quotall. The provision of insurance software for brokers from a dedicated company providing service on a 24/7 basis is compelling – particularly if it’s free!
The benefits of outsourcing your insurance platform
There are pro’s and con’s to outsourcing, and below are the top 6 reasons to outsource your insurance software.
- Lower operational and staff costs are usually the main reasons companies choose to outsource and, done properly with the right partner, it is possible to achieve significant savings. Using a service like Quotall’s will reduce or negate the need for building your own full-blown IT department.
- Using an outsourced service can bring efficiencies and enhanced productivity through access to people with substantial subject matter expertise and experience – all, of course, without the overhead.
- Outsourcing also enables insurance brokers to concentrate on their core business. Companies often underestimate the distracting effect of having to maintain, upgrade and develop their own software and hardware, as well building and managing an IT function.
- Outsourcing can provide brokers with instant access to world-class insurance systems and services without the high, on-going costs of acquiring, maintaining, upgrading and developing the technology.
- Brokers can mitigate risk by outsourcing. Every aspect of Quotall’s insurance software solution is enterprise class ensuring 24/7 access to services, complete reliability and conformity with current regulation.
- Insurance brokers can also use an outsourced service to access new markets quickly, with minimal business risk and cost. Quotall’s insurance technology will provide brokers with access to new, insurance related products and services, specialist scheme products and, of course, access for some brokers to whole new lines of business.
Some things to keep your eyes on when outsourcing
There are also some potential pitfalls to avoid when outsourcing, and below are the key considerations for brokers.
- By outsourcing you are handing the management and control of that function over to another company. You need to find an outsourcing company which maintains similar (or better) values and standards to your own company.
- Your contract with the outsourcing company will cover the details of the service that they are providing. Of course, anything you want on top of this will probably come at an extra cost. Make sure you know what you are and are not getting.
- Your business and customer data may well be held by the outsourcing company on their systems. Make sure your data is properly protected.
- If an outsource company is running part of your business operations for your business, you will have a vested interest in the financial health and security of that company. Do your due diligence before choosing an outsourcing partner, and monitor their financial status going forward.
While there are some things to watch out for when outsourcing, we believe these are easily manageable and are outweighed by the benefits. The fact is that most leading enterprises world wide utilise outsourcing and offshoring as a core component of their day to day business strategies.