General insurers across the globe have a fiercely competitive market with a supplier-customer chain model driving approximately 70 percent of the overall sales generated by any insurance company. Intermediaries are very critical to supplier-customer chain management; for instance in the U.K., the intermediaries are generating sales revenues of over GBP 225 Million on a month-on-month basis. The phenomenal amount of premium generated brings along with it the complexity of managing multiple broker relationships. Most or all brokerage models work on a 30-60-90 day credit-line period. This builds a self-delinquent model, which needs to be managed based on relationships and strong credit controls coupled with reconciliation and cash application. Delinquency management or a recovery model thereby creates a cross-section across the supplier-customer chain model and is critical to the cash flow of a business.
WNS, a leading global Business Process Outsourcing (BPO) company, has evolved over the years to provide specialized collections services through its global offices present in key geographies. The WNS’s Insurance Services group has tailored a unique collections model that is effective in reducing the high delinquency plaguing the industry. This article provides an overview of WNS's end-to-end capability in a recovery model space as well as relationship management and reconciliation both of which are critical for ensuring cash flow and maintaining reduced delinquency levels, and substantiates this with a case study which presents WNS's intervention in supporting its client with the implementation of a more efficient credit control.
Considering the dynamics of the collections department and its impact on the top-line of insurers, WNS Insurance Services has developed a real-time performance measurement and monitoring tool that is scalable and customized for different clients in the insurance industry. For instance, the WNS team of subject-matter experts (SMEs) mapped the linkage for one of its insurance client's Oracle-based collection platform with the credit terms of the intermediaries as well as with the analytics team who extract the vital statistics at the end of every month. This team was then able to replicate and split the monthly MI on a day-to-day basis by manually entering the systems and punching in the values for the key metrics.This helped in creating a visual factory and provided detailed insights to all the stakeholders. The team was also able to identify the poorly performing intermediaries and did an effective credit control which helped in enhancing collections on current as well as the overdue buckets.
WNS leveraged its research and analytics capabilities to drive the entire collections and credit control strategy. For instance, Building the overall Loss-Plan based on historical trends and expected delinquency levels based on paper type and current performance. Segmentation of Inventory with focus on new acquisition and First Payment Default. Hold-back strategy and letter strategy for self-cure based on risk-based segmentation of Inventory. Optimum capacity utilization based on inventory type–Account-to-Collector ratio (ACR) and inventory segmentation-based capacity model. Equip the business to make quick decisions through strong rigor on Delinquency Movement Matrix (DMM) and roll-rate–flow-rate visibility. Enable easy inventory movement and reconciliation based on best-of-the-breed performance from site through clear line of sight of inventory as well as reconciliation process.
One of the key activities in the collections world is timely identification and allocation or receipting of monies along with reconciliation and application of funds in the correct account. The WNS-proposed approach for its customers to increase cash flow and reduction of funds in the suspense account is as follows:
The age of debt and the type of account decides the collections effort to be utilized. It is obvious that the approach to early-stage collections and late-stage collections will be different. Building on this, in most of our non-portfolio-owned processes, we have built core teams that address the different ageing buckets.
This approach leads to the following benefits:
WNS supported a leading global insurance company with implementing an efficient credit control platform
Our client, one of the leading insurance companies, embarked on a journey to move its credit control function from its already existing mainframe to a more advanced Oracle-based platform. The objective was to have one finance application and consolidate all the functions being performed on different platforms due to multiple acquisitions that our client had made over the years. This move was in anticipation of higher operational efficiencies and better quality of reporting and interface. WNS SMEs were invited by the client to participate in the design phase to test and implement the new platform, and also provide suggestions to make it more user-friendly and efficient.
As our teams progressed to the cut-over date when migration of the policies to Oracle and sunset of the legacy system was completed, our team encountered various interface errors in the platform, for instance,
Key Steps Undertaken at WNS to Control the Situation
Benefits Delivered by WNS
The key steps taken by WNS had a direct impact on controlling the situation while the IT teams worked nonstop behind-the-scenes to fix the errors that had taken a huge toll on our client’s profitability. The timely support that the client received was greatly appreciated as it enabled:
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