Insurers are discovering that strategic outsourcing ventures performed overseas can provide a great deal of mileage when it comes to capturing significant long-term efficiencies.Those that have launched offshore endeavors have found that establishing a presence outside the U.S. with information technology and business process outsourcing possesses a greater degree of leverage for a couple of reasons. From a labor standpoint, the cost of doing business outside the U.S. is far less expensive, and the savings can be passed along to the client.
Carriers have also discovered a treasure trove of IT talent that resides offshore, particularly those specializing in areas of software and application development.
Newark, N.J.-based Prudential Insurance Co. of America has established offshore outsourcing ventures that range from creating its own subsidiary in Ireland to the engagement of external third-party vendors to provide services, which it has done in India.
In September 2000, Prudential launched a subsidiary, Prumerica Systems Ireland Ltd., designed to develop leading-edge software technology concepts. Based in Donegal, Ireland, the outfit has about 210 individuals to support the venture. One way that Prumerica mines for IT talent is by collaborating with the Industrial Development Agency of Ireland (IDA) to recruit skilled information technology graduates from Letterkenny Institute in Donegal to join the Prumerica team.
As part of that effort, the company has launched an ongoing internship program where one position is filled each year by a degree-year student at Letterkenny Institute. The intern will have an opportunity to join the Prumerica team and receive hands-on experience in the development of software programs for Prudential.
In India, Prudential has established relationships with two vendors that encompass a total of 400 people. "India has developed core competencies for systems and software development, and has also developed a high skill level in areas like customer relationship management," says Jane Landon, chief information officer for Prudential Institutional Services Inc. "In Ireland, they have developed a lot of skill with newer technologies."
Prudential has developed an expertise in overseas outsourcing to the extent where it's been able to "elevate its business to the next level by putting solid metrics in place to ensure quality and attain high service levels."
But Landon offers a word of caution to those seeking to launch an offshore enterprise or to form an alliance with a third-party provider. "If you're outsourcing offshore make sure that you've done your homework on what it can achieve for you because once you send it offshore, it's difficult to bring it back home," she adds.
