Today's blog comes from Peter Allen, Partner and Managing Director, TPI.
Keep an eye out for the ripples of activity in the insurance processing segment. There has been big movement by big players.
Last year, Prudential UK completed a large deal with Captiva, a real game-changer for managed service offerings for the insurance market. Then, this year, along comes the Aviva-WNS deal - another big move foreshadowing some major market changes.
Large insurance organizations are looking to restructure their operations to improve their cost models, achieve more flexible capacity, and enhance their analytical capabilities. The insurance processing industry is saddled with a heavy legacy burden and the investments required to modernize and transform are daunting.
Alas, that's where the outsourcing industry comes into the picture, providing a leveraged investment approach for new capabilities and flexible capacity.
Over the past several years, insurance companies have increasingly leveraged offshore delivery, whether captive or outsourced, to reduce cost, increase efficiencies, and transform processes. It's the applications-support functions that are largely being supported offshore for both corporations and individuals. They include general insurance, healthcare, life and pensions, and property and casualty.
But very few insurance companies have aggressively moved key components of their operations offshore, and that gives rise to a rather attractive market opportunity.
The Prudential UK and Aviva moves have paved the way for some increased market activity among the insurance segment. Question is: How long before the ripple effect turns into waves of change?
