Business Process Outsourcing Delivers Cost and Quality Advantages for RSA

With almost a 300 year heritage RSA is the oldest insurance company in the world still trading under its original name. RSA is a leading multinational insurance group. The company has operations in over 30 countries and provides its products and services to more than 20 million customers in over 130 countries. For 2007, the Group reported net written premiums of UK £5.8 billion.

RSA is a focused general insurer positioned in markets where it can achieve sustainable profitable performance. The company’s business purpose is to help customers protect themselves against the risks they face in their businesses and daily lives by providing insurance solutions to meet their individual needs.

To remain responsive to customers, RSA has transitioned with the times to enable customers to interact with the company in whatever way suits them best. For example, in June 2001 RSA UK launched a subsidiary called MORE TH>N, which offers financial services via the Internet and telephone direct to consumers.

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In 2003, under the leadership of Andy Haste, the new Group CEO, RSA announced aggressive action to reduce costs. The company set an annualized expense savings target of £270 million, to be achieved by year-end 2008. Some of the strategies for reducing costs included improving processes through systems transformation, and selective use of business processing outsourcing (BPO) and information technology outsourcing.

In the area of outsourcing, the company sought a partner with a history of delivering impressive results for clients. Offshoring is the fastest growing segment of Accenture’s business, a recognized leader in BPO. A successful outsourcing program could deliver multiple benefits: increased flexibility through alternative resource pools, labour arbitrage savings, and access to highly educated, skilled work forces.

RSA formally selected Accenture in November 2003 to deliver its BPO solution.

Accenture began by identifying the key processes suitable for transition to an outsourced model. RSA agreed with a phased approach, starting with a pilot group of 100 full-time equivalent employees before transitioning operational processes from further business units to create a total of 1200 full-time equivalent roles offshore.

To-date the BPO programme has transitioned over 900 of the UK full-time equivalent roles to Accenture’s BPO facilities in Bangalore & Mumbai since commencement of the service in March 2004.

Processes delivered in India encompass front-line customer service as well as back-office administration services across RSAs’ sales, service, claims & customer accounting functions, supporting both direct customer and intermediated business.

Accenture is using its Strategic Delivery Model─an industrialized approach to deliver outsourcing services rapidly, reliably and cost-effectively─as the foundation for a high-quality solution to create sustained business value. This approach combines Accenture’s world-class business skills, delivery capabilities and global assets to maximize return on investment, reduce costs and manage enterprise risk.

For RSA, Accenture is utilising multiple workforces and using the Accenture Delivery Centers in Bangalore and Mumbai. Accenture’s team of UK and India consulting staff collaborate with RSA executives and subject-matter experts to manage the project and transitional activities. Using components of the Accenture Delivery Suite for Outsourcing, Accenture is continuing to adapt key assets, tools, methods and processes to enable consistent, collaborative work practices and smooth transitions between locations and teams.

The project team assembles the India-based management and staff responsible for the outsourced processes by using the Accenture BPO recruiting model and adapting it to include RSA specific tests and profiling criteria. This flexible approach to the training of India employees is delivered through a framework that includes initial instruction to address RSA and UK culture, as well as accent development for staff in front-office operations. Process-specific training is developed through detailed process definitions and knowledge-transfer discussions. Training also addresses legal and regulatory requirements to ensure BPO agents are in full compliance with UK regulatory authority requirements (e.g., data protection, information security, and Financial Services Authority Staff Training & Competence).

As RSA continue to operate service centers in the UK, the company is determined to maintain standards for consistency across front- and back-office processes, and are keen that they maintain an ongoing relationship to ensure that the service & interactions the customers have with the BPO centre left them feeling valued. Consequently, RSA trainers are responsible for delivery of the process training to the majority of BPO staff in India. In addition, for selected processes Indian BPO staff receive training in the UK. This approach enables cadres of “super-users” for specific processes to convey experiences of UK operations to their India colleagues.

The success of this flexible training approach employed in India has been highlighted by Bridget McIntyre, RSA’s UK Chief Executive following a visit to the Accenture Delivery Centre in Bangalore in January 2006:

“It is clear to me that the quality of your people is high and this is evidenced by both the standards of voice and back office skills that we witnessed. It is also a reflection of the effort put in behind the scenes to ensure your people are well trained.”

Ahead of each process going live in India the applications necessary to deliver service are transitioned to the Accenture facilities, using Accenture technical infrastructure. This is designed so that the BPO operation operates seamlessly as another node in the operational topography of RSA.

The performance of the BPO operation is assessed against a range of metrics and service-level agreements, which is agreed on a process by process basis ahead of go live. The development of detailed service management frameworks like these enable valuable comparison of the BPO operation with UK onshore operations.

In the wider implementation, additional software applications will be made available in India as the remaining roles are transitioned. These applications will support a growing number of personal and commercial processes in sales and servicing, claims, and finance & accounting. Accenture software assets, including the Accenture Insurance Solution and Accenture Claim Components, will progressively replace legacy applications. The new software assets will become a core element of the BPO solution to deliver consistent, courteous and knowledgeable customer service to RSA customers throughout the world.

High-performance insurance companies “better manage across the hard and soft market cycles to pull away from the competition,” according to Accenture research. Outsourcing is helping RSA in this regard by reducing operational costs while maintaining high service levels.

Accenture’s deep insurance industry experience and strategic insights helped to identify major BPO opportunities. In less than a year’s time, the financial benefits are already visible due to Accenture’s commitment to a well executed transition. All activity–including recruiting and training staff to help them become highly productive–has been transitioned to India on time and to plan due to Accenture’s extensive experience developing high-performance offshore operations. BPO is expected to deliver labor arbitrage and increased staff productivity.

Labor unions were engaged during the pilot and commented that the approach was a model for other organizations. The company continues to work closely with the unions. As much as possible, job reduction in the UK is being managed through natural turnover and redeployment.

In addition to cost reductions, RSA is benefiting from high service levels, which are essential for customer satisfaction and future revenue growth. Performance reports indicate that calls transferred back to the UK are minimal, sales rates and service levels are at similar levels to the UK, and Claims utilization exceeds the UK level.

“Overall I am impressed with the quality of the operations in Bangalore” stated Bridget McIntyre, UK Chief Executive, “I see your operation as key to our ambitions in the UK.I will continue to take personal responsibility through my team to ensure that we are working with you to deliver excellent service to our customers and take advantage of the additional opportunities the BPO operation provides.”