In the report Latin American Insurance BPO Market Study: A Deal Analysis, Celent provides some context for discussion by establishing the current uses of business process outsourcing by Latin American insurers for core insurance services in a concrete way, based on input from insurers and the companies providing BPO services.
For this first Latin American Insurance BPO trends report, deal volume was lower than expected from the participating global vendors. The deal data submitted by BPO providers reflects a Latin American market where deals are predominately smaller in total revenue (less than $5 million in value) and contracted with either life insurance or multi-line insurers. Deals are evenly spread across Tier 1 through Tier 3 carriers. Short-term deals (one to three years) are more common than longer deals.
The report examines the market size and provides some estimates of how it will evolve, along with key market trends and findings. A detailed deal analysis provides some guidelines about the BPO buyer and the processes involved in these deals.
“There are different types of buyers of BPO. The insurers in this report are current adopters, but in Latin America, insurers in general could be considered laggards,” says Karen Monks, an analyst with Celent’s Insurance practice and coauthor of the report. “This group includes insurers that perceive the risk, particularly loss of control, to be a clear reason not to outsource. It is likely that economic uncertainty will reinforce these perceptions.”
“The primary value proposition of insurance BPO has been cost reduction. This continues to be true in Latin America. However, Celent sees the focus turning in other geographies towards process efficiency and effectiveness as insurers demand outsourcers process more complex work. As Latin America becomes more mature in its adoption of outsourcing, this trend will be more common,” adds Juan Mazzini, a senior analyst with Celent’s Insurance practice and coauthor of the report. “The focus on cost savings and efficiencies could easily shift towards more strategic investments for insurers such as digital, analytics, and innovation, opening a whole new world for insurers and providers.”
