Everest Group Identifies Four ‘Must Haves’ for BPO Providers in Life & Pension Insurance Market in 2019 | Press Release
Everest Group report describes clear marketplace advantage held by service providers who offer end-to-end capabilities, onshore services, domain expertise and digital proficiency.
The Life and Pension (L&P) business process outsourcing (BPO) market has seen a consistent pace of year-on-year growth in the range of 9 to 10 percent since 2014. According to Everest Group, growth will accelerate in the future, jumping from a market size of US $2.3 billion in 2017 to US$3.1 billion by 2020. However, growth will be focused on four distinct areas as buyers demand these specific capabilities from their service providers:
- End-to-end delivery capabilities: Insurers are moving away from managing multi-vendor engagements to consolidating their vendor portfolios. Buyers are also demanding greater value-addition from service providers, including support on faster launch of new products, customer experience and regulatory compliance.
- Onshore presence: Buyers in almost all the major geographies are now demanding an onshore presence of service providers. Buyers often seek localized presence to minimize language and cultural issues, to ensure quality of customer service, to ease relationship management, and to address political and regulatory requirements.
- Domain expertise: As buyers expand the scope of services with service providers, they will be inclined to engage with providers that have deeper domain expertise.
- Digital proficiency: Buyers are increasingly considering service providers for their digital initiatives. The ability to deliver integrated and modernized platform solutions will differentiate service providers in the L&P insurance BPO market.
“In 2019, we will see buyers in the L&P insurance BPO market increasingly partnering with service providers to leverage the latter’s technological capabilities and expertise,” said Saurabh Verma, practice director, Business Process Services, at Everest Group. “In particular, as insurers’ hurdles continue to magnify and the need to address inefficient legacy systems becomes unavoidable, buyers will be even more open to leveraging external administration platforms. Thus, providers who have invested in digitally modernized and integrated platform solutions are going to have a clear advantage.”
These findings are discussed in more detail in “Life and Pensions (L&P) Insurance BPO: Annual Deal Trends Report 2019.” This report provides comprehensive coverage of the global L&P insurance BPO market, including the adoption trends across geographies and buyer size, factors impacting the market, key solution characteristics, emerging trends and the service provider landscape.
Other Key Findings:
- New deal signings were witnessed across multiple geographies including the United States, the United Kingdom, Asia Pacific, and Continental Europe. L&P insurance BPO signing activity was the most intense in North America and Continental Europe.
- Ensuring buyer satisfaction has become absolutely essential for service providers as renewals account for the majority of signing activity. Additionally, as buyers endeavor to move up the value stream in their outsourcing relationships, service providers need to consequently build supporting capabilities.
- Adoption of Robotic Process Automation (RPA) and analytics in L&P insurance BPO contracts has steadily been increasing. However, the pace of adoption is slower than expected owing to multiple reasons such as complications around contract pricing for RPA leverage.
- The demand for BPaaS models is getting stronger as service providers have developed suitable domain expertise and supporting platform capabilities over the years that could address buyers’ margin issues, volume fluctuations, and archaic technology infrastructure challenges.