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Posted on October 15, 2024

The insurance industry has always relied on outsourcing, but its role is evolving rapidly.

Traditionally, outsourcing was limited to functions like claims processing or customer service. Today, insurers are turning to outsourced partners for specialized roles, such as compliance, state filings, and actuarial work.

“Outsourcing is a good thing, and we see more and more carriers and MGAs looking at this as a line item in their budget,” says Paul Martin, Martin & Company CEO and founder. “It’s about moving a product to market faster and having the specialized expertise to get things done.”

Because of this, outsourcing firms are becoming more like strategic partners, providing insurers with the flexibility to scale operations and access niche expertise as needed. Outsourcing firms with a deep understanding of compliance and product development can help insurers navigate regulatory requirements, speeding up time-to-market for new products.

“Many insurers want a partner that acts as an extension of their team,” notes Martin & Company’s SVP of Compliance, Sonja Rodebaugh. “This way, insurers can strategically focus on areas that require specialized knowledge, often found via an outsourcing partner.”

In the face of talent shortages and regulatory complexity, outsourcing is increasingly seen as a long-term strategy, not just a short-term fix. Choosing the right partner will be essential for insurers to maintain compliance and achieve their business goals in 2025 and beyond.

Key Takeaways:

  • Outsourcing is shifting from transactional to strategic, with a focus on specialized functions.
  • It provides insurers with flexibility and access to expertise, helping them remain agile.
  • Selecting the right partner is critical for long-term success.

Want to learn more about the trends impacting the insurance industry in 2025? Download our free whitepaper.