Jessica: Hello and welcome to the WNS business insights podcast series. My name is Jessica Reinelt and I am your host for this podcast and joining me today is Rajesh Desingu, Vice President, Insurance Practice at WNS, North America. WNS is a leading global business process outsourcing company. Today we’ll be talking with Rajesh on the topic of how insurance companies can leverage business process outsourcing to improve their policy administration function. Hello Rajesh and thank you for joining us today.
Rajesh: Hi Jessica, looking forward to the conversation.
Jessica: Okay great Rajesh, why don’t we start by talking about some of the trends and challenges insurance companies have to address in policy administration and servicing?
Rajesh: Jessica, like most of the industries, insurance companies are also facing their most challenging times in the recent history. Now according to a BCG article, the insurance industry has lost about 1 trillion dollars in market capitalization since the end of 2007. Now this kind of crisis hits every function of the insurance company and puts pressure on operations.
Jessica: So, these sound like real challenges. How can outsourcing help policy administrators?
Rajesh: I think Jessica, outsourcing can really help senior executives who are responsible for policy administration. Now we just spoke about the cost. Like it costs about $200 - $350 per year to service a life policy. Now that you are talking about one single life policy. Now if you look at most insurance companies, the bigger ones have millions of policies and then even the smaller ones have a few hundred thousand policies. Now these are real costs. An outsourcing service provider can service the same policy for approximately $100 per year. Now Jessica, that’s 50 percent savings on each policy. Another critical benefit that outsourcing can help with is in improving customer service while keeping the cost down. So that’s ensuring you have more satisfied customers; you are getting it done at lower costs. What more can you think of? That’s how outsourcing can really help.
The bottom line is that if implemented properly, business process outsourcing can be a fast and a simple solution to rapidly reduce costs. You know it help organizations survive the current economic challenge and set the stage for future growth and expansion.
Jessica: Okay, so can you share some examples of how WNS has helped reduce cost and improve efficiency of policy administration processes?
Rajesh: Sure Jessica. I can give you several examples. Now let’s take the example of the work that we do for one of the world’s largest insurance groups. We manage a range of policy administration processes. The insurer was experiencing significant error rates and much longer response times which led to customer dissatisfaction. The part of the transformation program that WNS implemented, we leveraged the deep knowledge of the insurance industry we have to deliver tangible results for the client. Now based on this, we were able to help the insurance company.
- Increase customer satisfaction from 76 percent to 88 percent
- We sell a consistent turn around time of more than 98 percent. That ensured that the turnaround time really got reduced and they were able to hit much better customer satisfaction rates as well.
- Improve the accuracy by 8 percent and reduce errors by 50 percent reported by customers. And there were no customer complaints for more than a year.
Let me take another example. For another leading insurance company, WNS delivered policy administration outsourcing services that has
- Helped them to increase customer satisfaction from as low as 29 percent to 65 percent within 18 months
- Reduce the policy application processing time by 30 percent and reduce reissues from 5 percent to 2 percent
Now Jessica, as you can see from these examples, the benefits of outsourcing policy administration processes include significant reduction in cost of operations, increase in customer satisfaction and improvement in efficiencies of processes.
Jessica: Wow those are really impressive numbers Rajesh. One last question. What are the things that senior executives should bear in mind when they are looking to outsourcing their policy administration processes.
Rajesh: That’s a great question Jessica. A few things that senior executives should do are Ensure that there is support for the program from the senior most levels in the organization They have to move fast because the truth is there is no change without urgency. One way to do so is by debiting budgets in advance. Building BPO savings into the budget, ensures that managers stay committed to the outsourcing program. Ensure the task force leading outsourcing initiatives is empowered and has the right talent Last but very important is the aspect of alignment of goals and culture between the insurance company and the service provider. The single biggest reason for failure of outsourcing agreements is lack of this alignment. So make sure you choose a provider who aligns to your goals and culture. Jessica: Rajesh thank you very much for your insights and for taking the time to speak with us today.
Rajesh: Thanks Jessica. It was a pleasure speaking.
Jessica: Thank you. For more information on how you can leverage outsourcing for improving the efficiency of your policy administration processes while dramatically reducing cost of operations, please visit www.wns.com/insurance/lifeandannuity.