Today, several insurance companies face challenges like strict regulations and economic instability, along with the COVID-19 impact. To remain competitive, they may consider insurance business process outsourcing. Insurance business process outsourcing is the contracting of certain business processes to an outsourcing company.

Customer service outsourcing is an appealing idea. Farming out your customer care to an outsourced agent can cut overheads significantly, saving you money, resources, and often, a great deal of stress. But it’s definitely not a one-size-fits-all solution, and there are no magic outsourcing beans you can use to make the process easier. That’s why you need to weigh your options carefully, especially when an external company could be directly interacting with your customers.

Outsourcing is a cost-effective way of handing over specific business processes to a third-party company. But it’s not without its risks. You should have a comprehensive outsourcing agreement with the service provider to minimize these risks, detailing everything from payments and data protection to milestones and penalties. In this article, we’ll explore what an outsourcing agreement is, three types of outsourcing agreements, and 15 components you must include in your contract.