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Insurance firms today are increasingly relying on a range of outsourcing options to drive efficiencies and greater business value.
Achieving high performance through insurance outsourcing is no simple matter, though—it is dependent on a set of industrialization principles, at the heart of which is the core capability of operational excellence.
Accenture learned, through a survey of insurance executives (the Accenture Life Insurance Platform Consolidation Research: 2006/7) that industrialization leaders have developed alternative sourcing practices—including outsourcing—more quickly than others. What is more, these leaders are further along than average performers in adopting alternative sourcing, not only in IT and distribution, but in every other major business process too.
The survey also explained the correlation between market leadership and the use of outsourcing. Of all the respondents that have completed consolidation, 43 percent outsourced some or all of their business processes. The benefits received by these companies were, on average, 17 percentage points greater than those that did not use BPO.
Insurers should consider six areas to improve their capabilities in operational excellence as they expand their outsourcing models and scope of service:
They should focus on the intended business value to be delivered, working with their outsourcing provider to articulate measurable goals.
They should take an optimized, industrialized approach. Their outsourcing provider should offer methods and processes that are sophisticated and highly automated.
They should insist that their outsourcing providers offer end-to-end processes, allowing them to achieve the maximum efficiencies and the most effective outcomes.
They should strive for agility by eliminating operational complexity. To expand into new markets and geographies, insurers require the speed and flexibility provided by an optimized, simplified platform.
They should prioritize scalability. One of the biggest benefits of outsourcing is the ability of the outsourcing provider to scale as the insurer’s business volumes fluctuate.
They should provide incentives for their outsourcing provider to deliver continuous performance improvement.
Contact us to find out how Accenture can help your organization develop the strategies to master operational excellence on the path to high performance.
July 29, 2008
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