Key Findings & Highlights:

NelsonHall has segmented the drivers behind auto P&C BPO into four areas:

• The need to reduce customer churn
• Customer administration
• Claims transformation
• Upping the underwriter.

The majority of providers are not auto-focused and therefore provide wider P&C BPO services applicable to auto, e.g. policy admin. Providers with a defined auto strategy go beyond this to include offerings in support of VRNs and auto-specific analytics, e.g. telematics.

Growth across all segments will be driven by the requirement of P&C insurers to:

• Reduce cost: while ensuring service level is not impacted
• Strengthen and deepen customer engagements: including demonstrating the ability to enter and exit new lines quickly and offer online purchasing
• Improve claims skills: sometimes not possible in-house, forcing acquisition of specialist providers.

Within P&C BPO, fewer than 50% of vendors have an auto specific strategy; most providers tend not to separate auto from other lines. Auto P&C BPO has seven service areas, with claims management and policy admin making up the bulk of activity in 2014.

Around 40% of auto P&C BPO providers have acquired to build capability; others plan to invest the same way in the next five years, in particular in support of analytics, where key capabilities for auto P&C BPO include subrogation services and, increasingly, telematics.

Strong themes going into 2015 will be around predictive analytics, automation and digital transformation; investment in these areas is on the agendas of auto insurers and auto P&C BPO providers alike.

The U.S., U.K. and Continental Europe are the main target geographies for auto insurance BPO, but unlike wider P&C, APAC overtakes LATAM in terms of future vendor interest for auto P&C BPO.

Critical success factors include the ability to reduce cost, increase efficiency and identify areas of risk, across the whole auto process.