A great deal has been written on behavioral finance to explain irrationality, perhaps it could be interesting to write some lines on BPO assimilation speed. While in important markets like the USA and the UK, BPO for Closed Books has become a commodity, managing many millions of policies, it has only got a modest traction until now in Continental Europe, except for The Netherlands. This should already ring a bell to, at least, study if this approach could also be interesting for CEO’s and Life Directors of Insurance Companies in other regions as well.
As by looking at the challenges, they appear to be quite similar across different countries and continents:
- An aging population making the product and system knowledge base very fragile and younger people no longer interested in learning old technologies;
- The use of obsolete software, which is associated with a high fixed cost base;
- The constant change of regulation and technology that forces to use almost all the available budget and the capacity only for maintenance.
Apart from these challenges, the level of loyalty has also changed. Users of corporate systems are getting younger, more inexperienced and unwilling to spend two years of training to become familiar with non-CX friendly screens. It means that you are trapped in an increasingly aggravating situation, where you, as CEO’s and Life Directors, cannot free up your valuable human resources to work on innovation.
A reason for this slow adaptation could be that it has been different to find a relevant or leading player in the region, since the European market is fragmented, has its own regulation and commercial logic, uses different languages, etc. This certainly seems to have slowed down the entry of Life BPOs into Europe, especially as most traditional BPO providers have a rather opportunistic approach. Nevertheless, the market is shifting gears and the new players come, more specifically, from the investors and private capital realm. And these players take a much more realistic approach and are open to adopting more quickly alternatives that lead to a lower cost level, setting a standard for everyone.
The good news for insurers is that companies like NTT DATA have understood that the market requires a BPO partner who works their heart out and is willing to take risks and approach this market strategically. From NTT DATA we have already invested considerable resources in building an innovation-driven platform, Global Insurance Digital Platform (GIDP).
Our platform uses leading partner solutions and provides Europe-based services to manage the books, making nearshore services in the EU-market more efficient, not forgetting to provide proximity through local front-end services for clients and brokers/agents.
On top of that, strong automation expertise provides a supplementary source of economy, making average cost reductions of 40% more the rule than the exception. Being a leading company that has already converted more than 60 books and being a strategic supplier to quite a few consolidators represent, naturally, a solid starting point. NTT DATA's 3,500+ BPO professionals serving our clients daily gives us the scale and proven experience and enables us to establish partnerships with leading companies.
Albert Einstein would have said that "insanity means doing the same thing over and over again and expecting a different result". Perhaps it's time to make a change and see if you can free your business from the burden of the past to unleash the power of innovation your business requires in this world of ever-faster changes. It's time to reduce risks, make your cost base lower and more variable, and gain organizational scalability.