Insurance BPO market to grow 5.4% annually through 2034: GMI report
DELAWARE, UNITED STATES — A Global Market Insights (GMI) report expects the global insurance business process outsourcing (BPO) market to grow at a compound annual growth rate (CAGR) of 5.4% from 2025 to 2034.
The market was valued at $7.5 billion in 2024, with claims processing being the leading sub-market, generating more than 30% of the total revenue.
Regulatory compliance driving insurance BPO demand
Compliance with the law is one of the main factors that contributes to the development of the insurance BPO services market. Governments have also enforced strict data security policies, including the GDPR in Europe, the NAIC Model Law in the United States, and China’s Personal Information Protection Law (PIPL).
The PIPL in China, issued in 2020, has especially influenced the industry by applying to any organization that processes Chinese citizens’ data regardless of the organization’s location. The law has stricter data transfer requirements, security controls, and higher penalties for noncompliance.
BPO providers have come up with new and improved solutions such as risk assessment, real-time management, and AI-based fraud detection to assist insurers in meeting regulatory requirements.
Technology transforming insurance operations
Technology is changing the way of working in the insurance sector. Claims processing services accounted for over 30 percent of total insurance BPO revenue in 2024. In terms of insurance type, property and casualty insurance had the largest market share, capturing 40.9 percent due to the increased uptake of digital claims management processes.
The integration of new technologies is changing the face of the industry. Robotic process automation (RPA) held the highest share of insurance BPO technology in 2024, driving efficiency across various insurance BPO functions.
“The utilization of artificial intelligence (AI) and machine learning (ML) software changes how claims processing, fraud detection, and underwriting are managed in the insurance BPO industry,” according to the industry report.
These technological developments are helping BPO providers to offer important improvements in operations. For instance, policy checking that has been enhanced by AI can “serve insurers with minimal manual intervention while improving accuracy and speed.”
As insurers focus more on customer relationships and product development than on back-office functions, outsourcing becomes more important.
The Asia-Pacific region appears particularly lucrative for expansion, with government measures such as tax incentives for IT and BPO companies in India to attract global insurers to develop their outsourcing activities.
