Outsourcing In Insurance Industry

Group 12

SP Jain Center of Management 2

Agenda

1

2

3

4

5

6

7

8

Value Chain of the Insurance Industry

Key Drivers of Outsourcing

Various Service Providers from India

Companies that Outsource regularly to India

Processes in the Industry

Outsourcing Model

Compliance Needs

Risks and Risk Mitigation

SP Jain Center of Management 3

Value Chain of the Insurance Industry

Product Development

Marketing

Administration

Asset Management

Claims Management

SP Jain Center of Management 4

Key Drivers for Outsourcing

Focus On Core Processes

Speed To Market Minimize Risk

Better quality Availability of

Credible service providers

Cost Benefits

SP Jain Center of Management 5

Various Service Providers In India

SP Jain Center of Management 6

Insurance companies that Outsource

SP Jain Center of Management 7

Processes

Policy pricing

Marketing activities

Product Planning

Business analysis

Claims evaluation, examination and litigation

Performance Management

Financial statement analysis

Investment functions

Reinsurance

Portfolio analysis and decisions

Compliance

Agency Management

Forms design

Voice Support via call centers

Forms data entry

Support to agents/ policyholders

Account reconciliation

Accounts payable and receivable

Premium refund

Policy owner services

Claims registering

Payroll processing

Technology & Maintenance

Core

Pro

cess

esN

on Core Processes

SP Jain Center of Management 8

Process Complexity GraphRising up the value

chain

SP Jain Center of Management 9

Outsourcing Model INSURANCE INDUSTRY

OUTSOURCING

ITO

BPO

KPO

Service Segment Services Offered

• Application Maintenance & Development• Infrastructure Management• Data architecture• System Deployment and Integration• Product design• Network and desktop outsourcing

• Premium accounting• Policy owner services• Support functions• Data entry• In bound and outbound call support• MIS

• High end Claims Processing • Annuity & Pension products process• Business analysis and technical design• Underwriting• Portfolio analysis and decisions• Corporate Treasury

IT Services

ITES

SP Jain Center of Management 10

Compliance Needs

Insurance

HIPAA

BASEL II

SOX ActUS Patriot Act

Gramm-Leach-

Bliley Act

SP Jain Center of Management 11

Risks

People• Attrition• Lack of knowledge transfer• Errors• Omissions

Technology• System down time• Network down time• Poor IT infrastructure• Data theft

Legal• Breach of contract• Client data pilferage• Sub contracting to small

players• Plagiarism of IP rights

SP Jain Center of Management 12

Risks MitigationPeople• In house medical center and provision of nutritious food• Implement information security standards; ISO 17999 and BS 7799• Provide training and clearly define metrics for knowledge transfer

Technology• Well equipped infrastructure with setup for back up• Effective fire walls• Regular system audit

Legal• Ensure fraud detection and prevention system by having strict security policies• Follow up or review of control mechanism and audit by third party• Appoint legal advisor or consultant in drafting SLA and strictly adhere to norms

of SLA

SP Jain Center of Management 13

• Higher-end processes such as underwriting, actuaries and analytics

• Average billing rates upwards by more than 25 percent in the next two to three years

Future Trends

SP Jain Center of Management 14

Thank You !!!