Why Small Agencies Are Hard to Find Insurance BPO Companies?

Small sized insurance agencies (less than 20 employees) are extremely hard to find qualified insurance BPO companies. Due to the limited scale, small agencies’ work volume is not that enough to outsource. For example, they may receive 4-10 certificate requests someday, but will not receive any such request for 3-5 days. This leads to most insurance BPO companies very difficult situations to handle the workload uncertainties. Insurance operation managers may plan to transfer more tasks for enough work load. This will require insurance BPO companies to assign a high-level and experienced processor to handle the low-value small agencies’ business.

It is difficult to cater to every client's wish due to various business situations, state law requirements and underwriting categories. Small insurance agencies are not easy to find insurance experts among hundreds of outsourcing companies which can be good fits to their special operational requirements. Operation managers are most likely to be exhausted after testing 2-3 insurance BPO companies. Nearly 60% of insurance companies spent 2-5 years and experienced 2-3 service providers before they really stabilized their insurance BPO strategy. Considering the limited workforce in small agencies, the outset of the outsourcing journey is destined to be tough.

In insurance BPO market, good service is always expensive. Large BPO companies are able to provide enough support in all aspects. With small agencies' limited revenue and scale, there is almost no possibility to grow like medium-large-sized agencies. In terms of growth potential, small insurance agencies' business is negligible to large-scale vendors.

The fact is large BPO companies charge small agencies higher prices than larger agencies, as BPO companies have to assign more experienced people to handle various insurance requests. (This is because larger insurance agencies usually hire more processors and have repetitive & heavy work volume, which will be easier to manage.) Furthermore, small agencies are price sensitive so both parties will be difficult to reach an agreement.

--Written by Michael Yang, President of DaDa Services LLC