Next generation outsourcing in the future of the life insurance and pension sectors: Building the platform for competitive transformation
27 September 2018
Across the life and pensions market, businesses are asking “how can we ensure that our operations are fit for the future?”
In UK Life & Pensions: A roadmap to succeed in a fast-changing sector, PwC looks at how today’s game-changing shifts in technology, demographics and customer expectations call for an overhaul of both front and back office capabilities. Far from being simply a cost play, a next generation of outsourcing is emerging as the cornerstone for this transformation. And with many service contracts coming up for renewal, this is the ideal time to bring outsourcing strategies up to speed.
Sea-change in capabilities
So how is outsourcing evolving, and what opportunities does this open up? The need to drive down costs while meeting client demands for greater speed and flexibility has seen outsourcers move to the forefront of modernisation in areas such as intelligent process automation (IPA) and application programming interface (API) connectivity. If old style outsourcing was a bulky container ship, reasonably cost-efficient, but offering limited manoeuvrability, the next generation is more of a speed boat, able to change course quickly and move swiftly through the waves of disruption and change.
As an insurer, the immediate benefit of buying-in to this next generation outsourcing is an injection of innovation; off-the-shelf modernisation of underperforming legacy systems; integration into modern front end capabilities and digital, on-demand infrastructure. As outsourced services become more scalable, integrated and customisable, there are opportunities to improve customer outcomes through sharper profiling, more tailored services and offering a consistent, always-on, omni-channel experience. There are also opportunities to boost agility and differentiation. These include the ability to connect with digital innovators (FinTechs) and offer a broader range of best in class products and services.
Gaining an edge
How can your business make the most of these next generation capabilities?
1/ Define your strategic blueprint
Determine where and how you’re going to compete, being clear on what differentiates you. What market openings could transform your growth potential, and what capabilities do you need to capitalise?
2/ Build or buy-in
Having determined the capabilities you need to succeed, work out which should be developed in-house and which could be more effectively brought in through next generation outsourcing.
3/ Set out a compelling business case
From IFRS 17 to the conduct agenda, there are multiple competing demands on resources. It’s therefore important to set out a clear and costed business case for outsource-enabled modernisation – your CFO wants to see the numbers. Alongside cost savings, measurable benefits range from improved customer satisfaction, revenue growth and significantly lowering the capital held against operational risk.