Moving Insurance BPO into the As-a-Service Economy<\/a>.<\/p>\nWhat are some of the changes you\u2019ve seen in the market since the last Blueprint?<\/span><\/p>\nIndustry forces are definitively impacting the nature of sourcing in insurance \u2013 be it more regulatory scrutiny and compliance requirements, aggressive competition, low margins or intensified market consolidation. To pull out a couple of examples:<\/p>\n
\n- Business models are changing in insurance, and service providers are in the midst of the storm:<\/strong> On one hand, carriers have ageing distribution networks with traditional agents and other intermediaries, while emerging ecommerce and direct sales channels continue to proliferate. Carriers are struggling to understand how to shift the sales paradigm with sales and interactions. Some of this requires new capability development in going direct to consumers for New Business\u2014setting up outbound and inbound sales and marketing operations, ecommerce channels, etc. Service providers are reacting accordingly to facilitate this growth, with more focus on the New Business service area than in late 2013, early 2014.<\/li>\n
- Growth and focus on TPA model:<\/strong> More private equity investors and reinsurance companies are taking on blocks of business, with the need for strong execution arms that are pushing more responsibility to TPAs. Similarly, ramped up new product development is driving more blocks into run-off. As a result, service providers have scrambled to acquire TPA licenses to service end-to-end insurance processes. We see far more TPA plays emerging in the last 18 months.<\/li>\n<\/ul>\n
We believe these industry forces, along with other equally relevant shifts in the global technology and services landscape, are gradually changing the nature of outsourcing in the insurance vertical towards more Insurance As-a-Service delivery. Our scoring methodology for this Blueprint has changed accordingly. Compared to the first Blueprint on Insurance BPO (Feb 2014), we increased the focus on innovation toward As-a-Service delivery, with 50% of the Blueprint scoring being tied to proven innovation capability and performance for these engagements, beyond the standardized insurance BPO processes.<\/p>\n
How are winning service providers approaching this market differently, moving beyond basic operational services?<\/span><\/p>\nService providers, after more than a decade of technology and business services expertise for insurance processes, are in a position to offer more consultative support to help design solutions and even operating models that are more modular, technology enabled and future-ready. Buyers are willing to act based on their internal culture, appetite for change and established relationships with service providers. Insurance As-a-Service is a reality for a growing subset of insurance BPO\/BPaaS engagements today. With this new focus on As-a-Service, we saw TCS, Concentrix, Genpact and EXL hold their leadership positions, as well as the entry of Infosys, Cognizant and WNS into the Winner\u2019s Circle.<\/p>\n
\n- Cognizant<\/strong> advanced due to the strong progress it has made in the last 18 months in integrating its insurance assets and partnerships, driving new business growth. Infosys<\/strong> has built a strong reputation based off its start with McCamish and made progress on its BPaaS strategy. WNS<\/strong>\u2019 focus on outcome based models and embedded analytics coupled with its flexibility and insurance knowledge helped it advance in position.<\/li>\n
- TCS<\/strong> and EXL<\/strong> lead the market on Insurance As-a-Service, both on articulating their vision and executing at scale. They are the ones to beat in their respective client markets.<\/li>\n
- Genpact<\/strong> and Concentrix<\/strong> continue to hold onto their leadership position based on solid execution and articulation of their As-a-Service vision; they will need to make strong investments to execute in the changing competitive landscape for As-a-Service.<\/li>\n<\/ul>\n
Interestingly, the service providers in the Winner\u2019s Circle stood out for As-a-Service delivery for different reasons. Some like EXL have more BPaaS plays, some like WNS are in for focusing on outcomes. The common underlying factor however is their willingness to evolve, the success of their initial forays into including As-a-Service components and charting out progressive visions for insurance that is visible to their clients.<\/p>\n