In a new 68-page report entitled 'BPO Opportunities in the Property & Casualty Insurance Sector,' analyst John Willmott finds that P&C insurers perceive themselves to be in a mature and highly competitive industry where process cost reduction and continuous service improvement are viewed as far more important mechanisms for achieving improvements in competitive positioning than process innovation.
NelsonHall's latest business process outsourcing (BPO) study for the insurance sector assists sourcing managers in understanding sourcing developments within the P&C or general insurance sector, and recommends options for vendors in addressing the BPO market in the P&C sector.
A major key to improved competitive positioning across the P&C sector, according to the author, is improved customer retention and revenue per customer. Companies feel under considerable pressure to simultaneously improve customer service to reduce customer churn and to reduce the cost of customer service. One of the keys to achieving both of these aims is increased coordination of service across channels, while encouraging clients to increase their usage of low cost channels.
In addition, Willmott fins that some P&C companies are investing in cross-selling initiatives, while others are merging sales and customer service roles in an effort to improve customer service and achieve increased revenue per customer.
Accordingly, there are opportunities BPO vendors to support P&C companies by:
• Assisting them in reducing the cost of new business acquisition and customer service.
• Helping them rebalance service delivery across the most appropriate locations.
• Facilitating the handling of peaks and troughs of activity.
Overall, 83% of P&C companies have bottom-line improvement initiatives planned for implementation by 2008. The principal initiatives planned include:
• Switching sales and service to lower cost channels.
• Process improvement.
• Relocation of personnel and processes.
• Increasing centralization/use of shared service centers.
Furthermore, Willmott reports that P&C companies are currently looking to rebalance their activities between locations. This is particularly important for the more mature service center organizations within U.S. and U.K. P&C companies. These companies are typically finding that they may need to relocate contact and customer-facing activities to more appropriate—not the lowest cost—locations, while continuing to transfer non-customer-facing activities offshore.
'BPO Opportunities in the Property & Casualty Insurance Sector' is published within NelsonHall's Insurance BPO subscription program, and is also available for separate purchase.
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