The global insurance Business Process Outsourcing (BPO) market is poised to grow at a compound annual growth rate (CAGR) of 5.4% from 2025 to 2034, according to a recent report by Global Market Insights.
Valued at $7.5 billion in 2024, the market’s expansion is being driven by increasing regulatory demands, as well as growing concerns around data security and compliance risks. Stricter regulations, such as the General Data Protection Regulation (GDPR) in Europe, the NAIC Model Law in the US, and China’s Personal Information Protection Law (PIPL), have imposed rigorous requirements on data handling, prompting a surge in outsourcing demand.
To help insurers navigate these regulatory complexities, BPO providers have leveraged advanced technologies, including automated risk assessments, real-time monitoring, and AI-driven fraud detection systems. These tools help insurers stay compliant while minimizing operational risks.
Introduced in 2020, China’s PIPL significantly impacts organizations handling the data of Chinese citizens, regardless of their location. The law enforces strict data transfer protocols, mandates security controls, and imposes heavy penalties for non-compliance, further fueling the demand for outsourcing services to manage these complexities.
As insurers shift their focus towards enhancing customer engagement and innovating products, the need for outsourcing to handle administrative tasks has grown. In 2024, claims processing alone contributed to more than 30% of the total insurance BPO market revenue. The property & casualty segment, accounting for 40.9% of the market share, is leading the charge, driven by the increasing adoption of digital claims management solutions.
Looking ahead, China’s insurance BPO market is expected to experience significant growth through 2034, supported by advancements in AI, big data, and automation. Additionally, the broader Asia-Pacific region is also benefiting from government incentives, such as tax benefits for IT and BPO firms in India, which are encouraging global insurers to expand their outsourcing operations.
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