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 of the 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 sales and distribution function.
Hello Rajesh and thank you for joining us today.
Rajesh: Hi Jessica. Looking forward to this conversation.
Jessica: Okay so why don’t we start by talking about some of the trends and challenges insurance companies have to address in sales and distribution?
Rajesh: Jessica, you know like most of the industries, insurance companies are also facing one of their most challenging crises in recent history. Look at the data. Annualized life insurance premium sales fell 23 percent in the first half of the year, the steepest slump in 67 years according to a recent LIMRA study. Now, industry wise premium sales fell 20 percent in the second quarter and policy counts continue to drop - down 4 percent in the second quarter. This is a real crisis and it affects every function of the insurance company and has implications across all operations.
Jessica, in my conversations with senior executives in the sales and distribution function, there are three challenges that they face: 1) How to effectively leverage all the channels of distribution. How do you increase the number and the value of premiums being returned per agent or ensuring an optimized mix of all the channels. 2) How do you develop new distribution channels to expand the presence. You’ve got to increase sales. Now, this is driven by the need to ensure that the product reaches the potential customers including the niche segment. 3) Sales. Sales. Sales. That is what really helps. And you’ve got to increase sales while reducing the operational costs. With top line growth being challenged, driving down costs is becoming critical for all functions including sales and distribution. So you’ve got to figure out a way to do all of this.
Jessica: So Rajesh, I can see how they are definitely challenges. I’d like to ask you how outsourcing specifically can help in sales and distribution?
Rajesh: Jessica, outsourcing can really help senior executives who are in charge of sales and distribution. For example, the foremost thing that we talked about is reducing costs. Outsourcing costs can reduce cost of the sales and distribution processes by taking advantage of the global delivery centre and the lower operational costs. 2) Agent productivity – Improving agent productivity and increase sales through cross selling and up selling of these products becomes very critical and you can get that done by outsourcing your research and analytics within sales and distribution and doing cross selling and upselling to their existing customer base. 3) Help provide better customer service, rather a proactive customer service. It’s not just enough to answer every question your customer has. Proactively reach out to them – the end customer as well as the agent. That ensures you have a much better customer satisfaction and we are able to retain more custom
Also, when exploring new channels for distribution, you know when you are trying to expand sales, you are looking for new distribution channels. Now, instead of investing internally to service these channels, insurance companies can outsource the support of these channels to outsourcing service providers to save on upfront costs. So there is no major capital investment and the time to market will be much faster.
Jessica, the bottom line is if implemented properly, Business Process Outsourcing can be a fast and a simple solution to rapidly reduce costs. It can help organization survive the challenges in the current economy and importantly set the stage for future growth and expansion as the economy recovers
Jessica: Okay. Can you share some examples of how WNS has helped reduce cost and improve efficiency of sales and distribution processes?
Rajesh: Sure Jessica. I can give you several examples. For a large US insurance and financial advisory firm, we manage a range of processes across life and annuity like new business processing, policy servicing, annuity conservation & work with their agents in the area of licensing compensation and field support. The objective was to increase efficiency and productivity while significantly reducing the turnaround time for various processes thereby improve the quality of the work being delivered.
Now we implemented a transformational program and as part of the transformational program WNS leveraged the deep domain knowledge we have of the insurance industry and we delivered tangible results for the client. For example, in new business processing, our target was to reduce the turnaround time to three days and while getting that done with just 18 errors per thousand. Now today if you look at it, we have achieved efficiency of less than one day (turnaround) and less than 5 errors per thousand. If you look at five errors per thousand, it almost accounts to 99.5 percent accuracy.
Let’s look at the annuities business. In this process, WNS has increased the guaranteed service promise to the financial advisors from 90 per cent to almost 100 percent within 13 months of starting this process.
Jessica: That’s great.
Rajesh: Now, let me share another example with you. For a global multiline insurer, we proactively worked with the agent in converting maturing life insurance policies into annuity contract and we even suggested cross sell and up sell of other insurance products based on the customer profile.
Now this helped them increase their revenue from the existing customers. We’all know that the cost of getting sales done from an existing customer is much more cheaper than going after a new customer. Moreover, WNS helped increase agent satisfaction from 67 percent to over 77 percent. We helped increase end customer satisfaction from 29 per cent to 65 percent within 12 months. The increased efficiency of agent support processes was achieved through you know resolving the issues much much faster. We increased the accuracy of application turnaround time like we just discussed in the example from as high as 18 days to under 5 days and we reduced the reissues from an average of 5 per cent to under 2 per cent. Jessica, as you can see from these examples, the benefits of outsourcing sales and distribution processes significantly reduce the cost of operations. It increases customer service and helps achieve efficiencies of processes
Jessica: Okay Rajesh, those were some really impressive statistics. One more question. What should senior executives bear in mind when they are looking to outsource their sales and distribution processes?
Rajesh: That’s a great question Jessica. There are a few things that the senior executives should clearly bear in mind. Ensure that there is support for the program from the senior most levels in the organization. That is extremely critical. They have to move fast, because the truth is there is no change without urgency. One way to do this is by debiting budgets in advance. Building BPO savings into the budget ensures that managers stay committed to the outsourcing program.
Now, ensure that the task force leading outsourcing initiatives is empowered and it has the right talent. Last and this is extremely critical is aspect of alignment of goals and culture between the insurance company and the service provider. If you can get this done, the outsourcing program would be successful. As we all know if this is not there, then almost every outsourcing agreement fails. So, make sure you choose a provider who aligns to your goal and cultur
Jessica: Rajesh, thank you for that and thank you for taking the time to speak with us today.
Rajesh: Jessica. It was a pleasure speaking.
Jessica: Thank you. For more information on how you can leverage outsourcing for improving the efficiency of your sales and distribution processes while dramatically reducing cost of operations, please visit www.wns.com.