application outsourcing (ao) in insurance – service ... · life and pensions other . property and...

Topic: Application Outsourcing (AO) in Insurance – Service Provider Profile Compendium

Copyright © 2013, Everest Global, Inc. EGR-2013-11-PD-0811

Banking, Financial Services, and Insurance (BFSI) Outsourcing Report: January 2013 – Preview Deck


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Background and scope of the research

Background of the research The BFSI industry continues to be the largest adopter of the IT Application Outsourcing (AO) services.

However, the industry dynamics changed significantly over the last 12 to 24 months. BFSI buyers are facing increasing pressure to drive top-line growth, manage complexity arising out of wide-scale regulatory reforms, and improve profitability by driving greater cost efficiencies. In order to achieve this, buyers are focusing on optimizing their portfolio of AO service providers

At the same time, service providers in the BFSI AO space are also ramping up their capabilities, building up scale, and investing in developing and acquiring IP/proprietary solutions. They are also forming alliances, which allow them to undertake and deliver on large-sized, annuity AO engagements. The competitive intensity in the BFSI-AO services space is at an all-time high. As a result, it is becoming difficult to differentiate among service providers based purely on delivery capabilities. It is, therefore, critical to have a comprehensive, well-rounded, and fact-based assessment of service providers’ BFSI-AO value proposition

In this research, we present detailed profiles of the 20 service providers featured on the insurance AO PEAK Matrix. Each service provider profile provides a comprehensive picture of their service suite, scale of operations, domain investments, and delivery locations

Scope of this report

This report includes detailed profiles of the following 20 service providers1: Insurance AO PEAK Leaders: Accenture, Cognizant, CSC, IBM GS, and TCS Insurance AO PEAK Major Contenders: Capgemini, CGI, HCL, HPES, iGate, Infosys, L&T Infotech,

MindTree, MphasiS, Syntel, and Wipro Insurance AO PEAK Emerging Players: Hexaware, Mahindra Satyam, Softtek, and Unisys

1 The scope of the report covers service provider information up to December 2011


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Table of contents (page 1 of 2)

Introduction and overview 5 The Everest Group insurance AO PEAK Matrix 11

Section I: Profiles of insurance AO Leaders 17 Accenture 18

Cognizant 25

CSC 33

IBM Global Services 41

TCS 49

Section II: Profiles of insurance AO Major Contenders 58 Capgemini 59

CGI 65

HCL Technologies 73

HPES 80

iGATE 87

Infosys 93

Topic Page no.


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Table of contents (page 2 of 2)

Section II: Profiles of insurance AO Major Contenders (continued) L&T Infotech 100

Mindtree 107

MphasiS 113

Syntel 120

Wipro 126

Section III: Profiles of insurance AO Emerging Players 133 Hexaware 134

Mahindra Satyam 140

Softtek 146

Unisys 151 Appendix 156 Glossary of key terms 157

2012 BFSI research agenda 159

Additional BFSI research references 161

Topic Page no.


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This Everest Group report is a compendium of detailed profiles of 20 service providers featured on Everest Group’s Insurance AO PEAK Matrix

Retail financial services (B2C1) Retail banking Lending Cards Commercial banking (B2B2)

Banking

Investment banking Asset management Custody & fund administration Brokerage Others

Capital markets

Life and pensions Property and casualty Others

Insurance

BFSI

Services industry

Traditional IO Remote Infrastructure

Management (RIM) Infrastructure Management

Services (IMS) Cloud

IT Infrastructure Outsourcing (IO)

Application development Application maintenance Independent testing Package implementation ERP services Business intelligence / data

warehousing

IT Application Outsourcing (AO)

BFSI-specific BPO HRO FAO PO Contact center Knowledge services

Business Process Outsourcing (BPO)

IT strategy / operations consulting

Business consulting Infrastructure consulting Infrastructure roll-outs

Consulting

This report analyzes capabilities of service providers for IT application outsourcing in the insurance subvertical with a focus on large (TCV >US$25 million), annuity-based multi-year (more than three years) relationships

NOT EXHAUSTIVE Focus of report

1 Business-to-consumer relationships 2 Business-to-business relationships


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This report is a part of the Everest Group’s series of nine reports focused on AO in BFSI in 2012

Banking

Capital Market

Insurance

Banking

Capital Markets

Insurance

Banking

Capital Markets

Insurance

Service Provider Profiles Compendium: IT Application Outsourcing Services

Capability profiles of service providers capturing their AO services experience in specific subverticals. Each service provider profile includes: Service provider overview – details of AO services capabilities, key investments,

proprietary solutions, and technological expertise Functional / Line of Business (LoB) focus Transactions overview for application services offerings Delivery footprint

Service Provider Landscape: IT Application Outsourcing Services

Each report provides: Assessment of service provider landscape in AO services and mapping of providers on

Everest Group’s PEAK Matrix – as Leaders, Major Contenders, and Emerging Players Comparative evaluation of BFSI-AO capabilities of provider categories such as global

majors, offshore majors, regional players, and tier-2 specialists. Benchmarking scale, scope, domain investments, and delivery footprint of each provider’s BFSI-AO practice

The 2012 BFSI-AO PEAK analyses focus on identifying the “Star Performers”, i.e., providers with strongest forward movement over time – both in terms of market success and capability advancements

Market Trends in IT Application Outsourcing Services

Each report provides: An overview of the application services market for the BFSI verticals, capturing key trends

in market size, growth, drivers and inhibitors, adoption trends, regional/functional break-outs of the market, emerging themes, key areas of investment, and implications for key stakeholders

Key movements in volumes/values of AO transactions, evolving trends, market dynamics, and emerging priorities of buyers in the last 12 months


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Everest Group’s BFSI research is based on two key sources of proprietary information

Everest Group’s proprietary database of more than 375 large, multi-year AO contracts within BFSI (updated annually)

The database tracks the following elements of each large AO relationship: – Buyer details, including industry, size, and the signing region – Contract details, including TCV, ACV, term, start date, service provider

FTEs, and pricing structure – Activity broken down separately for banking, capital markets, and

insurance, and by line of business (for example, life insurance, property and casually (P&C), and reinsurance)

– Scope includes coverage of buyer’s geography as well as functional activities

– Global sourcing, including delivery locations and level of offshoring

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Everest Group’s proprietary database of operational capability of more than 20 BFSI AO service providers (updated annually)

The database tracks the following capability elements for each service provider: – Major BFSI AO clients and recent wins – Overall revenue, total employees, and BFSI employees – Recent BFSI-related developments – BFSI AO delivery locations – BFSI AO service suite – Domain capabilities, proprietary solutions, and intellectual property

investments

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Note: We continuously monitor the market developments and track additional service providers beyond those included in the analysis Confidentiality: Everest Group takes its confidentiality pledge very seriously. Any information, that is contract-specific, will be presented back to the industry only in an

aggregated fashion

Service providers assessed

http://en.wikipedia.org/wiki/File:Mahindra_Satyam_Logo.svg


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Service mix FY 2011; US$ million

Geographical mix FY 2011; US$ million

100% = xx 100% = xx

Company description Company X is a global provider of IT and BPO services. Its IT offerings span technology consulting, application development and maintenance, systems integration, software products and IT infrastructure services. It primarily serves BFSI, telecom, retail and manufacturing verticals Headquarters: XX XX Website: www.companya.com

Company X | Insurance AO profile (page 1 of 5) Corporate and BFSI overview

U.S.

Europe

Latin America

APAC ADM

Infrastructure services

BPO

Consulting

Key financial parameters Revenue in US$ million

Services offered for BFSI vertical Application services for money transfer, credit cards, loans, wealth management, anti-money laundering, and mobile banking; ERP solutions; IT infrastructure support; product licensing and reselling

Major BFSI clients Bank A, Bank B, Financial Services Firm C, Insurer D, Trading Services Firm E, Investment Bank F

FY 2009 FY 2010 FY 2011

XX

1 FY ends on December 31 Source: Everest Group (2013)

Scale of BFSI subverticals Banking Capital Markets Insurance

>US$500 million US$100-500 million <US$100 million

Revenue1 from BFSI vertical Revenue1 from other verticals Operating margin

http://www.companya.com/


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Company X | Insurance AO profile (page 2 of 5) Insurance AO capability assessment and market success

Scope Offers solutions in the areas of XX, XX, XX Covers all insurance subverticals with major focus on XX Equal mix of revenue from large and small deals in insurance AO

Delivery footprint Over XX delivery centers across multiple countries such as XX,

XX, XX, XX, XX for insurance AO services High degree of offshore leverage with over XX% resources employed at

low cost locations, especially India

Transaction success Over XX insurance AO clients, including global accounts, which are

served in multiple geographies Over XX large active insurance AO deals with average TCV of US$XX

million and average contract duration of XX years Major insurance AO clients: XX, XX, XX

Domain investments Proprietary solutions and frameworks: XX Acquired XX in 2011 to strengthen its existing P&C, component-based

software platforms Multiple alliances in the insurance vertical: XX

Headline assessment Targeted solutions for insurance, combined with strong revenue growth and client wins, enabled Company A to further strengthen its leadership position in the insurance AO marketplace

Scale Derives XX% of its total revenue from the BFSI vertical, with

~US$XX million from insurance AO services Registered a strong growth of XX% in its insurance AO revenue in 2011 Over XX AO FTEs engaged in serving North American insurance clients

Life and pensions Other

Property and casualty

North America EMEA

Latin America APAC

Geographic scope Insurance lines of business

High Medium Low Success dashboard1

1 Transaction success for large-sized deals; assessment relative across service providers Source: Everest Group (2013)

Measure of capability: Very high High Low Medium

Everest Group PEAK Matrix for insurance AO

High

Low Low High

Emerging Players

Leaders

Delivery capability

Major Contenders

Mar

ket s

ucce

ss

Company A


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Proprietary solutions (representative list)

Line of Business Solutions

Overall BFSI Data management tools: tools for data cleansing, data generation, data migration solutions, and data-masking tool

‘AAA’: financial services CRM solution

Insurance “XYZ”: Policy software for P&C insurance carriers, which includes modules such as policy administration, rating, rules, product definition and configuration as well as product templates

“ABC”: Software to manage core business functions, including policy processing, billing, and claims

Company X | Insurance AO profile (page 3 of 5) AO domain investments

Key alliances (representative list)

Alliance partner Purpose of alliance

Partner A Implementation partner for P&C suite

Partner B Co-development of software for claims

Acquisitions (representative list)

Target Date Capabilities added

Target A 2009 Software testing capabilities for insurance industry

Source: Everest Group (2013)


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1 Publicly-announced insurance AO transactions during 2009 to 2012 Source: Everest Group (2013)

Recent transaction activity1

Buyer’s name Announcement date TCV estimate (US$ million)

Duration (years) Contract details and services

Firm A Jan 2011 XX XX Maintenance of applications and provision of desktop services

Firm B Mar 2009 XX XX Maintenance and support of insurance administration systems

Firm C Dec 2008 XX XX Implementation of ‘ABC’ life insurance solution; maintenance services

Company X | Insurance AO profile (page 4 of 5) Insurance AO transactions activity

NOT EXHAUSTIVE


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Company X | Insurance AO profile (page 5 of 5) Key offshore AO delivery locations

India

Poland

Malaysia

Mexico

Brazil

China

Vietnam

Thailand

Czech Republic

Bulgaria Slovakia

Chile

Source: Everest Group (2013)

NOT EXHAUSTIVE

Confirmed location for insurance AO 500-1,000 AO FTEs

>5,000 AO FTEs 100-500 AO FTEs

1,000-5,000 AO FTEs <100 AO FTEs


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BFSI Outsourcing research agenda (page 1 of 2)

Topic Release date

Published Current

June-2012 IT Application Outsourcing (AO) in Banking – Trends and Future Outlook

August-2012 Application Outsourcing (AO) in Banking: PEAK Matrix Provider Landscape – Evolution at Play

September-2012 IT Application Outsourcing (AO) in Insurance – Navigating Business Challenges through Technology

October 2012

Applications Outsourcing in Banking – Service Provider Profiles Compendium

October 2012 Global Sourcing Trends in the U.S. Mortgage Industry

October 2012

A PEAK into the Leaders, Major Contenders, and Emerging Players of the Banking BPO Market

October 2012 Webinar Deck: PEAK into the BFSI Outsourcing Market

June-2012 Report Card for the Indian IT Majors – Pecking Order Analysis of the "WITCH" Group

July-2012 BFS BPO Annual Report 2012 – Strong Growth Post the Downturn

May-2012 Trade Reconciliations Business Process Outsourcing (BPO)

October 2012 IT Application Outsourcing (AO) in Capital Markets Annual Report – Change is the only constant

November-2012 Insurance Business Process Outsourcing (BPO) Market 2011-2012 – Annual Report

October 2012 Application Outsourcing (AO) in Insurance: PEAK Provider Landscape – Policies for Growth and Differentiation

http://research.everestgrp.com/Product/11748









https://research.everestgrp.com/Product/11829































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BFSI Outsourcing research agenda (page 2 of 2)

Topic

Published Current

November-2012 Banking BPO Service Provider Profiles Compendium

November-2012 A PEAK into the Leaders, Major Contenders, and Emerging Players of Capital Markets BPO

Release date

Q1-2013 IT Application Services in Capital Markets – Service Provider Profiles Compendium 2012

December 2012 Service Provider Landscape for IT application services in Capital Markets – PEAK report 2012

December-2012 A PEAK into the Leaders, Major Contenders, and Emerging Players of Insurance BPO

December 2012 Capital Markets BPO Service Provider Profile Compendium

January-2013 IT Application Outsourcing (AO) in Insurance – Service Provider Profiles Compendium

January 2013 BFSI BPO Service Provider Profiles Compendium – Insurance BPO




















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The following documents are recommended for additional insight into the topic covered in this report. The recommended documents either provide additional details on the topic or complementary content that may be of interest 1. IT Application Outsourcing (AO) in Insurance – Navigating Business Challenges through Technology (EGR-2012-11-R-0744): This report

provides an overview of the application services market for the insurance vertical, capturing key trends in market size, growth, drivers and inhibitors, adoption trends, regional/functional break-outs of the market, emerging themes and key areas of investment, and implications for key stakeholders. The focus in 2012 is also to capture the key movements in volumes/values of insurance-AO transactions, evolving trends, market dynamics and emerging priorities of buyers in the last 12 months

2. Application Outsourcing (AO) in Insurance: PEAK Provider Landscape - Policies for Growth and Differentiation (EGR-2012-11-R-0772): This report provides a comprehensive assessment of the service provider landscape in AO services for insurance and maps them on Everest Group’s PEAK Matrix. It also benchmarks the scale, scope, domain investments, and delivery footprint of each provider’s insurance AO practice. Finally, the 2012 insurance AO PEAK analysis focuses on identifying the “Star Performers”, the providers with the strongest forward movement over time in terms of market success and capability advancements

3. IT Application Outsourcing (AO) in Capital Markets Annual Report - Change is the only constant (EGR-2012-11-R-0766): This report provides an overview of the Application Outsourcing (AO) market for the capital markets industry, through an in-depth analysis of large-sized AO contracts (i.e., contracts over US$25 million in TCV and over three years in duration). The report analyzes key trends in market size and growth, demand drivers, adoption and scope trends, emerging priorities of buyers, key investment themes, and future outlook for 2012, with regards to such large capital markets AO deals

For more information on this and other research published by the Everest Group, please contact us: Jimit Arora, Vice President: Rajat Juneja, Practice Director: Kiranjeet Kaur, Senior Analyst: Pallavi Saxena, Analyst:

[email protected] [email protected] [email protected] [email protected]

Additional research references

Phone: +1-214-451-3110 Email: [email protected]

Everest Group Two Galleria Tower 13455 Noel Road, Suite 2100 Dallas, TX 75240










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