Product Type: Market Research Report
Published by: Datamonitor
Published: May 2008
Product Code: R313-32540Description Introduction
To be competitive, insurers need to transform their legacy policy administration process so that they can get to market quicker and lower their costs. One strategy for addressing these issues is business process outsourcing (BPO) of the policy administration function.
Scope
This report looks at policy administration BPO from the perspective of both the provider and the insurer. The report covers both life and non-life policy administration. The report is globally orientated but speaks a great deal to the US and European market.
Highlights
Insurers must match innovation and expansion with a policy administration platform that can cost-effectively improve time-to-market. Old, rigid systems do not suffice, highlighting the potential value of working with an outsourcer. The increasingly competitive marketplace along with the long-term deterioration of wage arbitrage elevates the importance of business transformation outsourcing (BTO). Only 4% of insurers with fewer than 1,000 employees currently outsource their policy administration; however, 22% are considering it.
Reasons to Purchase
Gain an understanding of the current market adoption for policy administration BPO, and explore how it could likely change. Explore different strategies that BPO providers are taking.
Table of Contents - Overview
- Catalyst
- Summary
- Key Messages
- Reducing costs and concentrating on core functions is driving policy administration BPO
- A flexible policy administration process can improve time-to-market and enable growth
- Transformative outsourcing will become increasingly important
- Platform utility is an increasingly important way for BPO providers to protect margins
- A balanced portfolio can afford BPO providers lower cost of sales and fewer market risks
- Table of Contents
- Table of figures
- Market Opportunity: Lean and Flexible - 21st Century Requirements
- Increased competition highlights the importance of cost reduction
- Maturing markets in the US and Europe drive the need for new products and new markets
- Complex and disparate regulations call for a flexible policy administration system
- Small and large insurers alike are interested in policy administration BPO
- Full-scale market adoption has been hindered by real as well as unfounded concerns
- Policy Administration BPO Evolution
- BTO: Taking BPO to the next level
- Historical evolution: Why the UK is a BPO hotbed
- Customer Impact
- Reducing cost and increasing flexibility
- Enabling insurers to concentrate on core competencies
- Making insurers over-dependent on one vendor
- Potentially diminishing the customer and/or agent relationship
- Go to Market
- A balanced portfolio lowers cost of sales and mitigates market risk
- Platform utility will become an increasingly important way for providers to protect margins
- A global delivery network can help alleviate some fears among insurers
- Recommendations
- Gain a balanced portfolio of open and closed books
- Gain a balanced portfolio of life and non-life policies
- Develop / acquire / enhance platform IP
- Build a global delivery network
- APPENDIX
- Methodology
- Further reading
- Ask the analyst
- Datamonitor consulting
- Disclaimer
- List of Figures
- Figure 1: Per capita premiums
- Figure 2: Premium volume of US, UK Japan, BRIC and emerging markets (2002-2006)
- Figure 3: Business drivers for retooling the policy administration function
- Figure 4: Current and planned policy administration outsourcing
- Figure 5: Current and planned BPO adoption rates by function
- Figure 6: Levels of policy administration BPO
- Figure 7: Current and planned policy administration BPO in UK, North America and Europe
- Figure 8: Benefits / risks balance for policy administration BPO
- Figure 9: Balanced portfolio of open and closed books
- Figure 10: Delivery center country destinations, ranked 1-4 (4 being best)
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