Episode 010 — The Digital Broker Podcast

Outsourcing Agency Operations: Why, When, and Where? (Part 2)


In the second part of a two-part series on outsourcing (click here to listen to part one), Steve and Ryan discuss how process outsourcing can both increase profitability and lead to happier, more engaged agency employees. They breakdown:

  • The benefits that process outsourcing has on the company and employees
  • Where to begin if you’re just getting started with process outsourcing
  • Potential drawbacks of process outsourcing
  • Major firms that provide process outsourcing for insurance agencies

Full Recap

Process outsourcing is a good option for those agency tasks that must be done consistently but that don’t take a lot of insurance knowledge to perform. Process outsourcing requires more strategic allocation than project outsourcing (discussed in Part 1), so there is significantly more back-end work that is required to execute effectively.

The Soul-Sucking Tasks

The success of process outsourcing is correlated with how agencies position it with their employees. Don’t tell employees that you are going to take their work away. Rather, ask the employees to tell you what work they want to have taken away. Every employee probably has a long list! What work do they hate? Which boring and “soul-sucking” tasks actively detract from their engagement and their enjoyment of work?

Policy checking is one task agencies might consider outsourcing. Agencies must check that policies accurately reflect what is in the agency’s system. So, although policy checking is a very important task—being that it offers one of the biggest E&O protections—it is it is also one of the most tedious and difficult. As a result, it’s often one of the last things to get done. (2:00)

Agencies may also consider outsourcing new business set-up. When the producer comes in with material they need to have put into the system to start working on an account (application, existing policies, claims information, etc.), the outsourcer then picks up the electronic or scanned version of that data and enters it into the system. (8:15)

Rating is another activity to consider outsourcing. As Steve notes, small commercial is among the most profitable and the most loyal business for agencies, but it is also among the most expensive. One major reason for that is that small commercial rating systems are somewhat scattered, making it difficult to get a price. By having an outsourcer go into carrier websites to do ratings overnight, the agency can have quotes back much quicker (often by the next morning!). This improves the experience for the customer as well as taking away another “soul-sucking” task from the employee, thus freeing them to focus more on more high-level, value-add tasks like strategizing. (9:10)

Outsourcing policy rating also allows the agency owner to more effectively manage carrier relationships. Often, an account manager makes the decision about where business is placed, and they make that decision based on how quickly they can get a quote from the agent portal. This process may not be the soundest strategy for the agent, nor is it always the best placement for the client. Outsourcing the rating process can make it easier to consider more factors than speed of quote alone. (11:05)

Where To Begin

Although there are hundreds of activities agencies might outsource, Ryan recommends that agencies start with just one. By starting with one impactful task, agencies can begin to understand and work through some of the challenges of outsourcing.

Effective communication strategies must be put in place and workflows must be well-defined for outsourcing to work. Then, once the challenges are better understood and addressed, and employees see that outsourcing is beginning to work, the agency will build trust and buy-in from staff and can begin to outsource additional tasks. (12:30)

Steve and Ryan recommend that agencies look at the outsourcer like they would a new employee. You would not typically fire an employee who hadn’t completely mastered everything within two weeks. Similarly, agencies must set and communicate expectations and resist jumping to the conclusion that “it didn’t work” before adequate ramp-up time is allowed. The expectation must be set that the outsourcing process will take time, more work up-front, and a lot of iteration before it will really begin to work. (13:45)

Potential Drawbacks

A few drawbacks to consider when thinking about outsourcing processes:

  1. Security of data—Because most outsourcing is international, it is even more critical that the agency feels comfortable that there are safeguards in place to protect data.
  2. Political perception—Both external (clients) and internal (employees). Typically, internal perception is the bigger problem; agencies must make it clear that outsourcing is not a job reduction strategy. Rather, agencies must communicate that that they want to pay good employees more and to put them on the tasks that really drive their engagement. Employees cannot be in fear or outsourcing will fail.
  3. Time difference—China (12 hours) and India (10.5 hours); can be problematic when outsourcer has issues accessing system or has other time-sensitive issues. Note: time difference can also be a pro—they work while you sleep! (16:20)

Some Major Outsourcing Firms

Domestic Firms

  • WAHVE (Work at Home Vintage Experts)– Primary domestic outsourcing firm. Requires that employees have at least 20 years in an agency. Provides account managers and CSRs. Most employees are remote and are either “pretired” or recently retired and looking for flexibility.

    Key benefits: Experienced team. WAHVE employees can be on the phone with clients. Provides the agency with an extension of their own team and who can be allocated in effective ways. They typically work during same hours as your agency. Extensive background and skills check is performed to ensure that the right WAHVE person is matched to the agency culture.  (22:20)

International Firms

  • ReSource Pro Solutions (RSP) – China-based. Ryan’s favorite strategic partner. Solely dedicated to insurance industry. Offers business process management for claims handling, submission-to-issue, policy servicing and more. Functions as an add-on to your agency with dedicated team members. Excellent hiring process and training, work environment for employees. Typically only viable for larger organizations as they generally require that agencies hire multiple RSP people. (24:08)
  • Patra – India-based. Provides wide variety of processing services to insurance organizations to reduce staff workload, minimize risk and lower costs while raising productivity, increasing capacity, and boosting profitability.
  • Marblebox – India-based. Focused on smaller organizations and independent agencies. Remote CSR resource. Hourly charge, very viable for small office, plug and play model.
  • Vantage Agora – India-based. Provides BPO, back office, insurance outsourcing services.  (26:10)

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