Claims Processing Services

Claims Processing Services Global Market Outlook

• The global market size for Claims Processing Software was valued at $40 billion in 2022 and is expected to grow at a CAGR of 8.3 percent by 2030

• The Asian locations are still ahead of others, when it comes to low-cost offshore delivery. Manila, in the Philippines recently overtook Mumbai, based on various criteria, indicating the attractiveness of a location

• The high adoption locations of Latin America support the operations for the whole of Americas, while the European locations support nearshore requirements for the Europe-based buyers

• Latin America supports all the European languages currently, as the service providers have invested heavily into strengthening this capability

Claims Processing Services Demand Market Outlook

• India is currently the cheapest offshore location for Claims Processing Services, with a strong specialist talent, the requisite language skills, and good infrastructure facilities

• Poland and Romania have a cost advantage over their European peers and serve as a best-fit near-shore location for clients in Europe, and offshore location for clients in North America, considering their language skills and cultural affinity, as compared to the Asian locations

• Out of all the countries in scope under APAC and EMEA region, India, Philippines, China, Poland, Romania, China, etc., are noted to be the most cost-effective locations for Claims Processing Services

• Property and casualty (P&C), workers’ compensation insurance, employee benefits—both life and pension (L&P), and health insurance are some of the common areas, where Claims Processing Service Providers play an important role in managing the end-to-end claims management operations, like processing of claims and settlement for Insurance and self-insured companies

Claims Processing – Drivers and Constraints

Drivers

• Increase in number of first-time outsourcers (especially among the small and medium-scale business and mid-market segment)

• Increase in demand for end-to-end claims management administration work, along with an expanded scope of services from the second- and third-generation outsourcers, are the key drivers for the market growth

• Mature buyers’ willingness to adopt next-generation technology/experience, offered by service providers, such as end-to-end transformative solutions, combined with domain and industry expertise; design-thinking approach; transformation frameworks; process reengineering; and next-generation innovative offerings around advanced analytics and RPA/AI-enabled claim settlement process, is also fueling the growth

Constraints

• Customer data security concerns: Fraudulence risk and risk of illicit usage of a company’s confidential data have forced companies to limit their outsourcing activities with only non-critical or low-risk processes to outsource

• Regulatory environment: Failure to comply with timely changes in regulations would stagnate the growth of the BPO companies. E.g., BPO companies to comply with the regulations related to legal frame for outsourcing partners and people working in the outsourcing industry issued by major locations, like the US, the EU, India, Philippines, etc.

• Cost of doing business: It has been observed that outsourcing companies, typically, are expected to face enormous pressure in delivering the best/quality results with a minimal cost of their services

• Business continuity and disaster recovery: Lack of proper business continuity plans in place, especially among small and medium-scale outsourcing suppliers, who are unable to sustain during the adverse cases, like the COVID-19 pandemic, would end up loosing their clients’ confidence and the prospective business