Win-Win Deal: LTV Modeling for Agency Compensation By Dr. Sethuraman Janardhanan

Agents are the crucial connect for insurers, however managing their productivity and the harmony of company-agency relationships have always remained areas of concern. The Life Time Value model brings in the required respite in such a way that insurance agents will soon begin to be perceived as value centers as opposed to cost centers.

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The Tricky World of Motor Insurance Claims Leakage and How BPOs Can Help By Jeremy Owenson

It’s a no-brainer that effective claims management is a critical success criterion for insurance companies. It has a direct impact on their margins through a higher or lower loss ratio. Controlling claims costs is paramount to controlling claims leakage. How can partnering with a provider keep claims costs low and thus plug the leakage, especially with claims leakage in motor insurance?

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Can The Internet Become The Primary Buying Mechanism For Life Insurance Products? By Jeremy Owenson

Selling of insurance has traditionally been the domain of Independent Financial Advisors (IFA). However, the advent of the Web changed the way people do business. The most common use of the Internet in the area of purchases has been tickets for travel and leisure. With time, the sale of insurance policies over the Internet, especially motor claims and health insurance, have also seen a steady rise. I came across a recent report by CapGemini, which stated that the Internet is the sole distribution channel for insurance products that has shown a remarkable growth of 170%. Most other channels such as banks, tied agents, direct writers, mobile sales force and telephone have shown negative growth.

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Solvency II And The Resource Crunch For Actuaries By Jeremy Owenson

Solvency II is significantly different from Solvency I, and forces companies to re-look at the way they assess risks and how these risks can, in turn, impact the business. The advent of Solvency II will require insurers to implement a new set of capital requirements and risk management standards. Instead of the earlier approach wherein liabilities were the main factor for deciding upon solvency, the new regime will assess market, credit and operational risks to calculate the amount of money an insurer needs to maintain solvency. Solvency II has been designed to fully reflect the latest developments in prudential supervision, actuarial science and risk management, and allows for updates in the future.

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Why Should A Provider Step In Early Into An M&A Deal? By Jeremy Owenson

We have been witnessing major Merger and Acquisition (M&A) activity between leading financial institutions in the UK. Often, these mergers involved companies whose individual components were not integrated. In the boom times, driving operational costs down was not a priority, but as we come out of the recession, the focus is on integration and cost reduction. This implies not just high-level integration, but root and branch work to get economic benefits. Where banks come together, they need to ensure that all their retail brands are acting together to ensure costs are controlled, and this includes Life and General brands within their portfolio.

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Will the Internet Change the Insurance Landscape? By Jeremy Owenson

It’s not unusual to find the denizens of the Web world using the Internet to compare prices on everything from travel to hospitality to loans, and now, more so, insurance products. What was traditionally thought of as an impregnable domain, owing to the requirement for 'human' contact, is finally yielding to the meteoric scope that the Internet offers.

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Tweet Car Insurance--the role of Social Media in Insurance Sales By Anish Nanavaty

The challenge for insurance companies is to rapidly assess how social media can positively impact their business, stakeholders and customers. They must also develop mechanisms to monitor feedback, track responses, and discern emerging trends and opportunities before their competitors do. If they can do so, then social media will prove to be an extremely beneficial channel to market.

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Leaner and Meaner through Outsourcing By Rajesh Desingu

In order to lead the pack, organizations must transform themselves into leaner and more efficient enterprises. Can outsourcing help companies in this pursuit? To put it in another way, “Can outsourcing providers such as WNS help them to manage their customers and partners, ensuring that their focus remains on core activities such as better product design and sales strategy?

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Outsourcing can help insurance companies map tertiary insolvency By Jeremy Owenson

While it is a relatively rare for reinsurers to go into administration, the risks of that happening in these economic times has increased. Moreover, there has been an increase in Solvent Schemes of Arrangement in which insurance companies are exiting from their contracts. This can leave the principal insurer exposed to a risk that it did not expect.

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Five challenges that the insurance sector will face in 2010 By Rajesh Desingu

As we begin 2010, insurers around the globe hope that business will return to normalcy after the 2008-2009 recession. It has been tough -- sales premia declined, policy counts dropped, and investment returns cratered.

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Three challenges for insurers who want to start a contact center for Islamic Insurance By Jeremy Owenson

‘Islamic banking’ and “Islamic Insurance” are the latest buzzwords in financial circles, especially for private and semi-private commercial institutions within the Muslim community. Based on the principles of the Islamic Sharia law with a practical approach to Islamic economics, it is restricted in its approach to undertaking transactions that have the sole aim of engaging in ethical investments. Islamic banks are growing at the rate of 10 to 15 percent per annum and have over 300 branches, across 51 countries, and after a hesitant start in the UK, insurance companies look set to expand their footprint.

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Reinventing Insurance Distribution By Rajesh Desingu

The challenge is to transform into a leaner and more efficient enterprise which functions profitably while generating value for the customer. But what will actually bring about these talismanic changes has been the subject of many discussions and roundtables in the insurance industry. To illustrate, in the first half of 2009, the sales of life and annuity products fell on an average of 23 percent. But even more challenging is the policy count that has declined by four percent. So it’s natural that every insurance executive that I have interacted over the last few months has been preoccupied with three elements:cost efficiency, proactive customer service and a focus on sales.

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How outsourcing can help the insurance company CIO By Rajesh Desingu

Today’s CIOs take key decisions that impact an organization across all functions and geographies. As a member of top management, not just in charge of IT, the CIO must pursue ways to bring value across all insurance company functions. The CIO is now a solutions provider who should look to include BPO as part of an integrated approach rather than stay within the confines of a technology solution.

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Proactive stance on data security gives India the edge By Jeremy Owenson

Data security threats include loss, theft and fraud which are a nightmare for every outsourcing company. No company can afford to take these threats lightly. Just one incident can shatter a company’s and a country’s outsourcing reputation.

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Outsourcing helps insurance companies launch new products By Rajesh Desingu

Insurance companies can obtain actionable insights through comprehensive product analytics. Most insurance companies have loads of data which they never analyze; with an investment in analytics, they can obtain key insights as to how to modify new products or develop new ones, pricing them for optimal sales.

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Outsourcing can help check insurance claims fraud By Rajesh Desingu

I recently read an interesting article which talks about fraud in health insurance. According to the National Health Care Anti-Fraud Association, estimates of health insurance fraud range between USD 68 and 70 billion or three per cent of total healthcare spending! Detecting and combating fraudulent claims is costly and time-consuming. Insurers who have historically used a so-called “pay-and-chase” method to detect fraud are now using a new method. Taking their cue from credit card companies, they are trying to predict risk by gathering insights from their huge, untapped databases.

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How analytics helped a US insurer devise an agent compensation plan By Rajesh Desingu

Insurance customers are increasingly buying their policies online due to convenience, less paperwork and faster response time. In fact, the 2009 comScore report, which asked auto insurance consumers how they obtained price quotes when they most recently shopped for auto insurance, found that online was the most commonly used channel by a wide margin.

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Use outsourcing to improve quality of information for decision making By Rajesh Desingu

Insurance companies the world over are experiencing tough times. Thanks to the economic slowdown, business has taken a hit- -sales premia have fallen, policy counts continue to drop, and the liquidity crunch remains. Given the uncertain economic environment, high quality insights that can aid senior insurance executives’ decision-making is becoming harder and harder to come by. There is no paucity of data – there is more than enough data-- but the challenge is to analyze this voluminous data in order to draw meaningful and actionable insights quickly.

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Outsourcing sales and distribution functions can boost sales and agent productivity By Rajesh Desingu

It's no secret that the insurance sector is experiencing one of its most challenging times. According to Limra, annualized life-insurance premium sales fell 23 per cent in the first half of 2009, the steepest slump in 67 years. Policy counts alone fell four per cent in the second quarter of this calendar.

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Measuring customer satisfaction is important – various approaches exist By Jeremy Owenson

"In God we trust, all others show data." I saw this pinned on the board of a senior executive responsible for customer care many years ago. He believed that what he could not measure did not exist. Granted, insurers spend a lot of time measuring satisfaction, either by surveying their customers following an event or by tracking the performance of their supply chain through satisfaction monitoring. There are a number of syndicates and peer review groups that benchmark performance and related customer satisfaction. However, many focus on the wrong metric—keeping score by tracking their league position year on year--rather than delving into customer insights in order to improve processes or retention.

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It’s far from over: Four ideas to help life insurers survive the downturn By Rajesh Desingu

While there appears to be light at the end of the tunnel for some industries, the insurance industry, particularly life and annuity lines, are still groping in the dark. This is born out by industry watchers. According to a TowerGroup report titled Guilt by Association or Real Trouble? Outlook for US Life Insurers' Profitability and Spending, “Life insurance companies have a heightened exposure to debt and equity markets through their massive investment portfolios and many of the popular variable annuity products carry investment risk to both consumers and insurers. The circumstances that brought AIG into the current financial crisis are not pervasive in the insurance industry, but AIG's downfall has caused panic among policyholders and contributed to an ongoing erosion of investor and consumer confidence throughout the industry.”

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Boosting insurance sales through a white label approach By Rajesh Desingu

Insurance companies are pushing to grow even in the current economic climate. But high marketing costs, budgetary constraints and time to market are a deterrent. As a result creativity in sales and marketing is more important than ever before.

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Outsourcing insurance policy administration helps cut costs and raise quality By Rajesh Desingu

When speaking with senior insurance officials in charge of policy administration, I cannot but help reflect that the challenges they face are not really new. Excessive paperwork, huge backlogs, sluggish workflows and neglected applications are historical operating challenges, yet they still keep coming up in conversations.

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Distance helps increase your privacy quotient By Pervez Workingboxwalla

I was recently making a presentation on data security and privacy policies to a healthcare service provider seeking to outsource their medical records processing to our delivery centers in India and Philippines. As expected, the client was extremely keen to ensure that both security and privacy of their client’s records is maintained...

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Quality is not an act, it’s a habit By Ujjwal Majumder

I am convinced that Aristotle, the famous Greek philosopher, would have made a great quality professional. Why? Around the 4th century BC, Aristotle said “Quality is not an act, it is a habit.” What is amazing about this statement is its relevance after so many centuries. In the last several years that I have been presenting to companies outsourcing or seeking to outsource I cannot help but draw reference to this statement. Interestingly in these presentations, I found a significant amount of consistency in themes of the discussion. Irrespective of the size of the company or the industry they belong to I have found a few themes which always draw a lot of discussion. To share a few of these themes - How many quality professionals are necessary to deliver the business process at desired efficiencies and levels of productivity? The ratios vary from 1:8 to 1:25, quality lead to associates – as a rule of thumb. The drivers of the choice of ratio are complexity of the business process, sample size to be audited and requirements in terms of improvement, among others.

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Migrating to knowledge-driven decision making By Brian Welsh

While not undermining the importance and allure of intuition, it is necessary to understand that making marketing decisions based on just plain intuition or obsolete knowledge or past experiences has an inherent risk of missing the finer vital details or widely misjudging. While successful decisions driven by haunches are lauded, big and expensive bad decisions based on gut feeling are either swept under the rug or conveniently forgotten. At this rate, companies working solely on intuitive-decision making will forever be working at suboptimal levels.

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CFO priorities in the present economic downturn By Manish Vora

Across the world, organizations are reviewing their operations because of the present global economic downturn. One of the most common CFO concerns is to ensure that the company’s finances are well managed and to trim business operations to be profitable. According to a Deloitte survey, 70% of CFOs plan to hedge or reduce risk in the balance sheet or in the business, and 56% plan to reduce debt levels. The companies that will differentiate themselves are not the ones that are counting their pennies right now, but those that are strategic about what they will be two years hence.

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