The world is different. No matter the reason or if we like it or not; the world has changed. Our industry hasn't let this go unnoticed, either. Carriers everywhere were forced by the COVID Pandemic to face Business Continuity issues, the abandonment of resource colocation principles and the thought of dropping premium.
So, in 2021, should you outsource of keep a function inhouse?
The short answer is: it depends. Outsourcing is, and remains, a tool to help an organization reach its own goals. Properly sourced Outsourcing offers the following:
Transfer of risks: Keeping up with system updates, personnel training and monitoring regulation changes are no longer your headaches. Continuity of the outsourced function is guaranteed and insured by your agreement.
Flexibility: Increases in service level or needs can be met without the usual hiring, training and reorganization. Conversely, decreases in service level are quick to show on your budget and don't include losing staff.
Cost Reduction: Outsourcing should ALWAYS be less expensive than bringing a function inhouse. When all associated costs to meet or exceed the service level are considered: staff, systems, overhead, future liability & risks, it should exceed your outsourcer's quote.
Shortcuts to Goals: This is a basic of any outsourcing situation, but is important enough to list. A good outsourcer doesn't just keep your current situation stable; they should work towards your goals as well and at a quicker pace than you were able to.
Trends in 2020 suggests businesses across industries are returning to simpler goals going forward: focusing on the value they provide while reducing costs and risks. The benefits listed above have not gone unnoticed as they fit these newer goals on a basic level: low cost, low risk, low distraction.
With the ongoing pandemic and uncertain future developments, the Insurance industry is in a particularly good position to leverage outsourcing to meet some of these new goals and take advantage of an outsourcer's flexibility.
Specifically, many Carriers find themselves in the middle of system upgrades, acquisitions or major personnel changes: projects started well before the pandemic. Now, the question is posed again under new light: do we outsource a particular function, or do we take it on inhouse?
The answer may change in 2021.
LGC, of course, can help a carrier no matter what the answer is when it comes to NCCI & Bureau reporting. We provide world-class outsourcing service with the above benefits and more. We also provide licensing and setup of wcSYNC: a fully-featured SaaS platform designed to help a Carrier take NCCI & Bureau reporting inhouse while still reducing costs and risks.
Learn more about wcSYNC here.
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