By Graham Twaddle, Chief Technology Officer at Corporate Modelling
The Life & Pensions back office has been through a number of significant changes over the past few years, including the push and pull of offshoring and onshoring. As the UK economy enters a more positive growth phase, what’s next for the insurance back office?
How can life companies work closely with their outsourcers to transform their businesses for the future?
Many life companies are increasingly buying closed books and their actuaries are predicting the costs to outsource the administration based primarily on averages. Actuaries currently have to look at the expenses in front of them and then make predictions based on what can be seen as simple, overarching information.
A shot in the dark
Due to a vast amount of product variations and policies, making truly accurate predictions is no easy task. Some policies will require a lot of administrative work, others less so, but how can this be identified on a case-by-case basis so that firms get the best possible deal when choosing an outsourcer to run their back office? More extensive analysis would drive greater efficiency. But how can this be achieved?
Business intelligence for life companies
Life companies can use technology to help evaluate business models and provide a clearer view of how much outsourcing the administration of a particular book is likely to cost. In particular, workforce management software, which provides detailed business intelligence, is set to revolutionise the back office and the relationship between life companies and their outsourcing providers in 2014.
Using workforce management technology to gather data from the back office shows actuaries precisely how many hours each plan takes to administrate. This in turn, provides senior management and actuaries with easy access to a bird’s-eye view of a policy book. Understanding all areas of the business and drilling down to grassroots information allows firms to make much more accurate evaluations on the cost to outsource policy administration.
Specialised workforce management tools can also use historical and current data to analyse individual policies and products in one clear dashboard. This is invaluable business intelligence, providing companies with a unique understanding of their policies and products. This can help them recognise which products are most profitable and which areas of the business are most efficient, and therefore enable them to better predict the performance of their business in the future.
Operational excellence for outsourcers
Not only are insurance companies able to develop a better idea of how to assess future costings by implementing improved workforce management, there are also significant benefits for the outsourcing providers themselves. Outsourcers can use workforce management software to drive greater efficiency in the back office by learning where time is spent and which products or customers need particular attention.
Back office employees are working away, but does the operations director really know exactly what is going on? Workforce management software can show them where a special focus is needed to administrate certain policy books, such as which skills are needed to deliver on a specific task, as well as who has the right training to complete these tasks toa high-level standard.This better equips the back office to run processes more quickly and smoothly, with the potential to provide a greatly improved service to policy holders.
By distinguishing where each individual back office employee’s skills are being used, outsourcing providers can allocate tasks accordingly and provide the correct level of training where necessary. This level of granularity drives greater operational excellence and can make the back office more productive and efficient, transforming the productivity culture of the company and offering higher return on investment (ROI) for all parties so that time and investment is utilised in the most effective way possible. Acknowledging productivity levels, recognising good versus poor performance andsupplyingimprovement training opportunities can help companies foresee any issues of this kind.
Looking ahead
As we move into 2014, life companies and their outsourcers can work closertogether togain a competitive advantage. Workforce management software has the power – both as a business intelligence tool for more accurate costing, and as an operational tool for more efficient processing – to improve productivity and sparka real cultural change in both insurance and outsourcing organisations.But only if these two types of businesses collaborate in a close partnership.
Having greater governance not only providescompanies with real-time information about their business, but alsoenables a more cohesive linear handling of work allocation, which will ultimately result in better ROI. Workforce management acts as a linchpin between life companies and outsourcers andthe front and back offices, so that all parties can work together to provide better products and services to the customers they serve.
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