The Best Outsourcing Models for Insurance Providers

Insurance providers are under pressure from every direction: rising loss ratios, regulatory scrutiny, new digital-first competitors, and customers who expect fast, empathetic support around the clock. That combination makes it difficult to scale with internal teams alone. 

That is why more carriers are turning to insurance process outsourcing to handle operational tasks, improve service, and free internal teams to focus on strategy and complex risk decisions. The key is not whether to outsource, but how to design the right outsourcing model for your organization. 

Below, we will walk through the main outsourcing models for insurers, where each one fits best, and what to look for when evaluating insurance outsourcing companies. 

What is Insurance Process Outsourcing? 

Insurance process outsourcing involves delegating specific business functions to specialized partners. These partners may handle front-office work, like policyholder support, or back-office processes that keep your operations moving. 

Common use cases for outsourcing for insurance companies include: 

• New business and underwriting support 

• Policy administration and servicing 

• Claims intake, adjudication support, and FNOL 

• Billing, collections, and refunds 

• Contact center services for sales and customer service 

• Back-office functions such as data entry, document indexing, and compliance checks 

The goal is not just lower cost. Modern insurance process outsourcing is about combining specialized talent, technology, and process discipline so insurers can respond faster to customers and market changes. 

Market data shows that this approach is now mainstream. Analysts from Zion Market Research estimate that the global insurance business process outsourcing market was approximately 7.5 billion USD in 2024 and is projected to reach around 10.9 billion USD by 2034, reflecting steady growth as carriers expand their use of outsourcing to scale and modernize.  

As more insurers lean on strategic partners for everything from claims support to policy administration, insurance process outsourcing is shifting from a cost-cutting experiment to a core pillar of operating models across P&C, life, and health lines.  

Why Outsourcing for Insurance Companies is Growing 

Industry data shows that outsourcing is no longer a side experiment for insurers, it is a core operating strategy. According to Allied Market Research, the global insurance BPO market was valued at nearly 8 billion dollars in 2022 and is projected to reach about 24.6 billion dollars by 2032, more than tripling in a decade.  

This trajectory signals that carriers are moving beyond limited pilots and are embedding external partners into critical functions like claims, policy administration, and customer service to stay competitive. 

Several forces are driving the increased reliance on outsourcing for insurance operations: 

1. Cost and productivity pressure
   McKinsey research suggests that insurers can improve productivity and reduce operational expenses by up to 40 percent over the next decade by reimagining processes and embracing digital and automation. Outsourcing partners with mature operations and technology can help deliver those gains faster. 
2. Rising service expectations
   Consumers expect quick answers, proactive updates, and seamless omnichannel experiences. Many insurers struggle to deliver that consistently with in-house resources alone. Outsourcing partner networks can supply licensed talent and technology at scale, especially for contact center and back-office work. 
3. Talent constraints and seasonality
   Insurance lines such as P&C, health, and life often experience seasonal spikes in volume, from open enrollment to catastrophic weather events. External partners are often better positioned to recruit, train, and schedule specialized staff for temporary or variable demand. 
4. Technology and automation capabilities
   Many insurance outsourcing companies now offer advanced digital capabilities like AI-driven routing, intelligent document processing, and automated claims workflows. A report cited by Ringy notes that automation can reduce claims processing time by up to 50 percent, which improves both accuracy and customer satisfaction. By pairing these tools with specialized talent, outsourcing partners help insurers modernize processes faster than most can achieve on their own. 

Core Functions for Insurance Process Outsourcing 

Before choosing a model, it helps to clarify which functions are in scope. For many carriers, the “best” model blends in-house and outsourced delivery for different parts of the value chain. 

Typical functions that benefit from insurance process outsourcing include: 

1. Policyholder and Customer Support

• Inbound and outbound customer service 

• Coverage questions and policy changes 

• Billing inquiries and basic troubleshooting 

• Retention and renewal outreach 

This is often the starting point for outsourcing for insurance companies, because customer contact is highly variable and can be standardized with strong governance and quality management. 

2. Claims Intake and Support 

• First notice of loss (FNOL) 

• Claim data capture and documentation review 

• Status updates and follow-up communications 

• Non-complex adjudication support 

Claims processing is one of the largest segments of the insurance BPO services market, driven by rising claim counts and complexity. Analysts from Mordor Intelligence estimate that claims work accounted for close to 40 percent of insurance BPO services revenue in 2024, reflecting its importance for both costs and customer satisfaction.  

3. New Business, Underwriting, and Policy Administration

• Application data capture and validation 

• Underwriting support tasks 

• Policy issuance and endorsements 

• Cancellations and reinstatements 

Specialized insurance outsourcing companies can take on structured, rules-based work so in-house underwriters can focus on judgment-heavy decisions and edge cases. 

4. Back-Office and Support Functions 

• Data entry and indexing 

• Document management and mailroom operations 

• Premium reconciliation and basic accounting support 

• Compliance and audit preparation support 

These functions are highly repeatable and ideal for insurance process outsourcing with clear service-level agreements and quality controls. 

Outsourcing for Insurance Companies: Key Delivery Models 

Not every insurer needs the same model. The best approach depends on your lines of business, regulatory environment, volume patterns, and internal capabilities. Below are the most common models of outsourcing for insurance companies, plus where they fit best. 

Model 1: Traditional Offshore BPO 

In a traditional offshore model, insurers delegate defined processes to teams based in cost-effective global locations, like the Philippines.  

The Philippines is now one of the world’s top outsourcing hubs, holding an estimated 10–15% of the global BPO market and employing more than 1.3 million people in BPO roles, making it the second leading outsourcing destination worldwide.  

Its contact center industry alone generates roughly $38 billion in annual revenue and employs around 1.7–1.8 million workers, underscoring how mature and scalable this market has become.  

This has been a foundational structure for insurance process outsourcing for many years. 

Strengths: 

• Significant labor arbitrage and operating cost savings 

• Large, mature talent pools with insurance experience 

• 24/7 coverage across geographies and time zones 

Best for: 

• Highly standardized processes like data entry, document indexing, and basic claims or policy servicing 

• Programs where cost efficiency is the primary driver 

• Non-regionalized work where language and regulatory requirements are well-understood in offshore markets 

Watchpoints: 

• Potential distance from core business stakeholders 

• Greater effort required for governance, quality calibration, and cultural alignment 

• Data privacy, security, and regulatory considerations that vary by jurisdiction 

When evaluating this model, look for insurance outsourcing companies with strong compliance credentials, robust data security, and a track record in your specific line of business.  

Model 2: Nearshore and Onshore Hybrid Delivery 

Many insurers are shifting toward a blended onshore and nearshore approach that combines cost efficiency with closer cultural and regulatory alignment. In this model, critical or complex interactions may remain onshore, while other parts of the value chain are handled through nearshore hubs. 

Strengths: 

• Easier collaboration with teams in similar time zones 

• Strong language support and cultural proximity 

• Flexible routing of work between onshore and nearshore centers 

Best for: 

• Customer-facing work where empathy, language nuance, and cultural context matter 

• Regulated products where regulators or clients prefer domestic or nearshore handling 

• Carriers that want to gradually expand outsourcing for insurance companies without fully offshoring operations 

Watchpoints: 

• Slightly higher cost than fully offshore models 

• Requires an integrated workforce management and quality framework to keep all locations aligned 

This hybrid model can be especially powerful for P&C and health insurers managing seasonal spikes. Nearshore teams can absorb volume surges, while onshore specialists protect the experience for high-value or complex interactions.  

Model 3: Flexible, Outcome-Focused Insurance Process Outsourcing 

A newer generation of insurance outsourcing companies focuses less on headcount and more on outcomes such as SLAs, NPS, and claim cycle times. These partners combine distributed talent pools with advanced workforce management and automation to align cost directly to productive work. 

In this model, providers may: 

• Tap distributed, remote talent networks across multiple regions 

• Use precision scheduling to match agent sourcing to real-time demand 

• Blend human support with AI tools for triage, self-service, and process automation 

Strengths: 

• Cost is more tightly aligned to productive time and actual volume 

• Easier to scale up or down without lengthy hiring cycles 

• Strong fit for omnichannel customer support and claims intake, where volumes can be unpredictable 

Best for: 

• Carriers facing volatile demand across sales, service, or claims 

• Programs where CX, CSAT, and speed are as important as cost 

• Insurers that want insurance process outsourcing partners who can bring consulting, analytics, and continuous improvement, not just staffing 

Watchpoints: 

• Requires mature operational governance so both sides share a clear understanding of KPIs and responsibilities 

• Change management is critical as internal teams adjust to a more dynamic, shared model 

When designed well, this model can help insurers close the gap between peak and off-peak operations, reduce non-productive time, and ensure that customers reach the right resource as quickly as possible. 

How to Evaluate Insurance Outsourcing Companies 

Regardless of which outsourcing model you choose, the partner you select matters just as much as the geography or structure. When you assess insurance outsourcing companies, consider the following questions: 

Industry and line-of-business expertise 

1. Do they have experience in your specific lines (P&C, life, health, specialty, or reinsurance)? 
2. Can they provide case studies or references that demonstrate results, not just headcount? 

Regulatory and compliance posture 

1. How do they manage data privacy, security, and regulatory requirements across jurisdictions? 
2. Do they support frameworks relevant to your business and geography? 

Technology and automation capabilities 

1. How do they use automation, analytics, and AI to improve accuracy and speed? 
2. Are they able to integrate with your core systems and tools seamlessly? 

Scalability and flexibility 

1. Can they ramp up quickly for seasonal peaks or large events (for example, catastrophe response or open enrollment)? 
2. How do they structure pricing, and is it tied to outcomes that matter to your business? 

Governance, quality, and CX focus 

1. What is their approach to quality management, coaching, and continuous improvement? 
2. How do they measure and report on KPIs such as claim cycle time, first contact resolution, and customer satisfaction? 
3. A strong partner will approach outsourcing for insurance companies as a long-term collaboration, not a transactional staffing agreement. They should be willing to co-design operating models, share insights, and evolve with your business over time. 

Choosing the Best Outsourcing Model for Your Insurance Organization 

There is no single “best” model that fits every insurer. The right approach depends on: 

• Your strategic priorities (cost reduction, CX improvement, speed to market, or all three) 

• The specific functions you want to place in insurance process outsourcing 

• Regulatory requirements in your lines of business and target markets 

• The maturity of your internal technology and operating model 

For some carriers, the answer may start with a traditional offshore or nearshore model for clearly defined back-office work. Others may move directly to a hybrid or flexible outcome-based model that ties cost more closely to performance and customer experience. 

What is clear from current market data is that insurance outsourcing companies are playing a bigger role every year. The global insurance BPO market is growing, claims and customer service processes are becoming more automated, and a majority of insurers already use outsourcing in some form.  

For insurance leaders, the opportunity is to design an outsourcing strategy that does more than cut costs. The most effective models help you stay agile, protect policyholder trust, and build a foundation for long-term growth. 

How Liveops Supports Insurance Outsourcing Models 

Choosing the right outsourcing model matters as much as choosing the right partner. Liveops works with insurers and other industries to design insurance process outsourcing strategies that fit their risk profile, customer expectations, and growth goals, rather than forcing them into a single delivery model. 

Liveops offers onshore delivery across the United States, nearshore options in locations like Mexico, and offshore teams in the Philippines, along with hybrid models that blend these geographies in one program.  

That means insurers can mix and match onshore, nearshore, and offshore resources to support different use cases, from licensed sales support and claims intake to policyholder servicing and back office work. This flexibility helps insurers treat outsourcing for insurance companies as a strategic lever instead of a one-size-fits-all decision. 

What sets Liveops apart from many insurance outsourcing companies is the focus on right fit design and measurable outcomes. Programs are built around: 

• Distributed, brand aligned talent who are prepared to handle sensitive conversations 

• Precision scheduling that closely matches staffing to demand to reduce idle time 

• Strong governance, calibration, and quality frameworks focused on CSAT, compliance, and efficiency 

• Technology that supports agents within the network with knowledge, workflows, and quality insights 

Because Liveops also serves industries such as retail, healthcare, financial services, and many more, insurers benefit from cross industry best practices in customer experience, digital channels, and surge response.  

Whether a carrier wants a domestic only model for regulated lines, a nearshore or offshore model for cost optimized operations, or a hybrid model that uses each geography for what it does best, Liveops can design and operate a solution that scales with the business.