To be successful, life insurance companies will have to look at new delivery models that may include a marketing/sales solution integrated into a business process outsourcing model, says Alsbridge Inc., a benchmarking, sourcing and transformation advisory firm, in its latest report, 5 Pressures Causing Life Insurance Companies to Rethink Outsourcing.
In just twenty-two years, 62% of the life insurance companies in the U.S. disappeared from the market. Alsbridge’s latest report discusses its lingering impact in one critical area - information technology. Alsbridge CEO, Chip Wagner gives an analogy of one being inside a box with outside forces beating on and says, “You can't move the box, so you simply have to absorb the blows and repair it as needed, that's what the life insurance industry has been facing for the past decade and the pounding doesn't look like it will dissipate soon.”
The pressure is coming from both inside and outside the life insurance companies. This whitepaper discusses the five pressures that are causing the life Insurance companies to rethink outsourcing, including:
1. The lingering recession. In tough times, individuals who would normally buy a five hundred thousand dollar policy, may only buy one with a face value of a quarter of a million or less.
2. The changing demographics of our society. In the U.S, we're living longer which affects retirement planning and life insurance policy needs.
3. The rise of the "managing general agent" or MGA. For an insurance company, MGAs represent a valuable channel to market because they bring qualified buyers.
4. Emergence of two new channels to market. Two technology driven channels- social media and mobility - have exploded on the scene and present new technical and resource challenges.
5. Need to contain costs. Margins are being squeezed and the need to continue to invest in new technology is increasing, not decreasing.
“The five pressures are encouraging executives of life insurance companies to look at service delivery alternatives that weren't culturally acceptable pre-recession,” says Dieter Thompson, president, Alsbridge. “This means outsourcing should be one of the delivery models discussed in the "C" suite.”
The report emphasizes that in order to adapt to the challenges that new channels to market and their technologies will bring, the life insurance companies will have to evaluate solutions for the entire value chain through the new lens of emerging and future technologies because these technologies will affect everything from product development, to sales and marketing, to product support, to the on-going customer interface.
For further details download the complete report 5 Pressures Causing Life Insurance Companies to Rethink Outsourcing.
About Alsbridge Inc.
Alsbridge is a global consulting firm that helps companies transform and optimize the way they purchase, manage and leverage technology and business processes. We have over 175 team members on 4 continents serving over 200 clients a year including more than 40% of the Fortune 500. Alsbridge has helped hundreds of companies reduce costs and get more value from their vendors. Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your service providers. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.
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