day 2 1110 dhiraj dolwani

8/8/2019 Day 2 1110 Dhiraj Dolwani

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www.niit.com www.niit-tech.com www.niitsmartserve.comGlobal Learning Solutions

Insurance BPO:the way forward

Dhiraj Dolwani

NIIT SmartServe


2/20

Business Process Outsourcing

The delegation of one or

more IT-and-labor-

intensive business

processes

(such as accounts

payable, call center-based

customer service, or

claims processing)to an external provider

that owns, administers,

and manages the

selected processes basedon defined and

measurable performance

metrics

Forrester

The final word!

Work where it makes economic sense


3/20

Three essential elements to BPO delivery

Labor

arbitrageProcess

improvement

Technology platform


4/20

BPO provides real benefits

Capture significant savings

Use mix of process efficiencies and low-cost labor

Avoid IT capital investments

Outsourcing allows companies to escape the upgrade

treadmill -- especially in non differentiating processes like

HR or accounting.

Move to variable pricing

CFOs like the idea of paying per policy for claims

processing, per headcount supported in HR, or perinvoice in accounts receivable or accounts payable.


5/20

Changing nature of BPO work

Example: Low end data entry Medical transcription

Low end(simple &

standardizedactivities)

Example:

Billing services Document management Policy servicing

Advanced technicalskill and some

judgment required

Example: Strategic planning and

forecasting Research & KnowledgeManagement

Critical work-typesExtensive

judgment andanalytical skillsrequired

Commodityfunctions, notdifferentiators;

with littlevalue add for

Insurers


6/20

Lines of Business

Business Processes

Life

HealthAnnuities

Retirement

PlansAuto

Liability Property

Marine

C H A N N E L S

Distributors Independent

AgentsThird Party

AdministratorsKiosks Call Centers Branches

Infrastru

ctureLayer

(HardwarePlatfo

rm,SecurityLayer)

Financial

Markets

Regulators

Banks

Internal

Communication

Channels

Call Centers

Distributors

Third Party

Administrators

ProductDevelopment

ClaimsMgmt

PolicyAdmin

ReinsuranceMktng. &Sales

E N A B L I N G P R O C E S S E SRisk

ManagementLegal &

ComplianceAgency

Management

Finance &

AccountingInvestment

ManagementSupport

Systems

E

XTE

R

N

A

L

IN

TE

R

F

A

C

E

S

Life Non Life

W

OR

KFLOW

Customer Management

Regulatory & Tax Environment

Insurance Spectrum

Underwriting


7/20

Insurance BPO:

Management of closed books of business Life policies are particularly well suited

These are old mainframe applications thatcan be expensive to maintain

Most choose to maintain the old applications

themselves or outsource them Offshore outsourcers are particularly well

placed for this


8/20

UK Life & Pensions policy admin services

InsuranceInsurance

CompanyCompanyUKUK

OutsourcerOutsourcer

OffshoreOffshorePartnerPartner

10 year

contract

Offshore BPOOperations for Life& Pensions

7yearco

n

tract

Tiger Business Process Outsourcer (BPO) UKs leading BPO for life andpensions work Maintains 4 million policies

Scope

All aspects of life andpension policy processing general servicing

amendments payments in payments out new business

US HQ36,000 employees100 countries

Whollyownedinsurancesubsidiary


9/20

Case1:

L&P closed book policy admin services

17th Nov2003

1st Dec 2003

26th Jan 2004

29th March 2004

Address change

Client change &

Quotes

Agent change

27th Sept 2004

25th Oct 2004

28th Feb 2005

28th June 2004

Pension Enquiries,

PensPolAlt & CeasePremium

Transfers, IncAddBen

& NewBusApps

Indexing

SP (legacy

platform)

Gone Away

8th Dec 2003

Contract (MSA & WPA) signed on 30th Sep 2003

14th Mar 2005

Suspense &

Refunds

Retirements

Simple work types

(contract amendments)

Indexing

(vital to onshore work

mgmt also)

Complex work types

(enquiries, payments-in

& payments-out)

OUTBASKET QUALITY

100% 100% 100% 100%

98.29%

98.86%

100%

96%

97%

98%

99%

100%

101%

Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06

Outbasket Quality Target

INDEXING QUALITY

97.3% 97.94% 96.82% 97.26%97.63% 96.84% 97.18%

65%

70%

75%

80%

85%

90%

95%

100%

F eb-0 6 Mar- 06 A pr- 06 May -06 J un- 06 J ul-06 A ug-0 6

Indexing Quality Target


10/20

Case 2: US variable annuity POS

Contract Set Up

1035 Exchange

Projects

Training

Production Logging

by SR's

38a-1 Reporting by

SR's

PRD - ServiceRequest

Reviewing reports

UpdatingProcedures

Sox Document

Maintenance

Weekly and Monthly

Production ReportingOMR Survey

Maintenance of

IIRWin Skill sets

System

Enhancement

Process (RITS)

Monitoring Daily

Production Queues

Merrill Lynch

Quarterly Reporting

Breakage Tracking

Address Change

Beneficiary

Changes

Agent Changes

Ownership Changes

Name Changes

Power of AttorneyTelephone

Authorizations

SSN ChangesClient Numbers

CIP Checks

Cost Basis

Account Values

ContractAcknowledgments

Trusts

BD Mergers

DOB Changes

SA Renewal

Options

Correspondence

Reallocations

Block Reallocations

Regulation 60

Advisory Fees

Cash Surrender

IRA Withdrawals

Partial 1035

Partial Withdrawals

Telephone Partialwithdrawal/surrender

Trustee to Trustee

TransfersTSA Loan

Processing

Approving ATR's

Free Looks

Check RegisterStop Pay and

Reissues

72T/Q Withdrawal

Automatic

Rebalancing

Dollar Cost

Averaging

Pre-Authorized

Checking

Systematic

Withdrawals

Death Claims

Scanning

Indexing

Cash Processing

QA of Service

Requests

QA of Financial

Transactions

Initial Payments

Rollovers

Pay-Ins

New

BusinessPayments

Imaging

and Admin

Services

Service

Requests

and

Reallocations

FinancialsMngmt

AdminQA

Death Claims

Monitor Disb/Systematic Email box

Non-Financials

Systematics

Disbursements

Admin

Processing lifecycle

Monitoring NF/Reall

E-mail box

Reallocations


11/20

The BPO market in the near future

Outsourcing simple tasks will continue to lead the market Check processing, Credit card processing

Shared services will ramp further Processes like finance and administration, and HR which are highlycommon across industries but require more interpretation than simplebulk transactions. Lend well to using self-service portals.

High-volume vertical processes will grow as a segment policy administration, claims processing

Specialized complex vertical processes (KPO) will gather more momentum: compliance support, environmental data

analysis & reporting


12/20

Knowledge based services

A major area for growth for offshore BPO is emerging inthe form of knowledge-based services, sometimes knownas knowledge process outsourcing (KPO).

KPO services are diverse, but are not typically amenable toa cut-and-dried rules-based approach. Instead, theyprovide higher value addition in which subjective analysis

or judgment is required (often using staff having higherlevel of educational qualification)

Examples include research & analytics, equity research

support, legal support and judgment-based aspects ofmortgage and insurance claims processing.


13/20

Case3:

Knowledge based Compliance Support

ClientClient

IFAIFA(Independent(Independent

FinancialFinancial

Adviser)Adviser)

SesameSesamewww.sesame.co.uk

ProductProductProvidersProviders

RegulatorRegulator

FSAFSA(Financial(Financial

ServicesServicesAuthority)Authority)

- Compliance Help-desk

- Commissions

- Compliance Services

- System Tools

- Product research

- Indemnity

Compliance Support for UK IFAsPost Sale Compliance Service(suitability of advice) for businesswritten for: Designated Investments(S&I, Pension, Protection), GeneralInsurance, Mortgage


14/20

Compliance support: process overview

Deficienciesareidentified

India

QC

Feedbackto IFA

Case

Review

Case

Closed

ReReview

UK

QC

UK

QC

IFAErrorLog

IFA responds withclarifications / data

Check if allpoints

resolvedand / orany furtherdeficiencies

After all pointsare resolved

CaseSelection,

CaseRequest, etc

QualitySampling

UK Process India Process

Customer serviceover telephone

Calling Members:

-To send in overdue

documents / cases

-Pro-actively Resolve

deficiencies if resolvable

over telephone

Receive Calls:

Addressing Advisers

concerns on

- reviews / approvals,- Financial Services

Authority based

guidelines / regulations,

Providing pre-sales

guidance


15/20

Future of BPO Delivery

An SOA formula lies at the heart of BPO delivery success Allow providers to build BPO-enabling extensions across multiple

customers

Ease the integration challenge for customers and suppliers Minimize implementation costs in the context of one-to-many

engagements

Longer-term, BPO blends with SOA to foster independentbusiness process services. Pursue a unified IT/business process approach to BPO

Take an active role in shaping BPO delivery

Organize for business process and SOA

IT enablement will not be an afterthought in BPO delivery:BPO is the beginning of the process-focused IT era.


16/20

Some insurance market implications

Insurers are redefining and reengineering their businessprocesses (such as policy and claims management) toattain greater operational efficiency and improve

financial performance. This will force integration andoptimization of business processes across multiplefunction areas.

Insurers' focus will return to their core competencies of

assigning and assuming risk, as well as underwriting.Internal investment for business process operationalexpertise will be reduced as insurers buy these servicesfrom BPO providers.

BPO providers' penetration into the core insurancebusiness will take different forms for different segments.


17/20

BPO key success factors

Process Transitioning Capability: proven methodology forbusiness process migration management

CAP-D

SOL-D

Transition

Service Delivery Robust technology & telecommunication infrastructure

Not necessarily bleeding edge!

Ramp-up and skill management

Ability to hire talent & train for skills

Cost control and productivity management

Six-sigma for continuous improvement & Reengineering for

radical benefits Trust and confidence

Ongoing long-term relationships


18/20

Case 4: Reimbursement process

Doctor entersproceduredetails on PDAat point-of-care

Claims Rules Engineintegrated at the back endcatches coding errors and

omissions and results in

cleaner claims & significantlyreduced denials

Further rules added based onclaims experience/denials

Registration/Schedulingapplication helps reducepatient wait times andcaptures all necessarypatient information

Image & Workflowsystem to manageelectronic access tocorrespondence,appeals, paper etc

Web based dashboard giveswindow to operations -status of claims batchessubmitted and ports topatient financial ledger


19/20

Summary

Changing nature of Insurance BPO work

Simple Rule-based Knowledge based

The way beyond could be to map the

customer view innovatively

BPO: US modelUK-Europe model

Australian modelInnovative/hybrid?


20/20

Questions?

NIIT Technologies Pty. LtdLevel 1, 51 Walker Street,North Sydney, NSW 2060

Stewart EvansSales DirectorTel : +61-2-9963-0098Mobile: [email protected]

NIIT SmartServe Ltd223-224, Udyog Vihar Ph-I, GurgaonHaryana 122002, INDIA.

Dhiraj DolwaniAssociate Vice President OperationsTel : +91-124-4002701Mobile: [email protected]

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