February 2, 2012: The recent trends in the European insurance sector indicate that the life insurance and pensions outsourcing is on the rise. For instance the Accenture’s insurance processing arm entered into an outsourcing deal with BNP Paribas. The contract spans over a period of eight years.
BNP Paribas Cardif is a subsidiary of BNP Cardif. The subsidiary operates in life and casualty insurance areas. It also operates in the area of property insurance. The company concentrates on other markets across the world such India, China, Russia and Brazil.
Based on the agreement, Accenture will handle a relevant portfolio of BNP Paribas Cardif’s offering. Accenture will handle the insurer’s call centres and related accounting activities.
Experts in the field say that the insurance industry is experiencing fundamental changes as a result of increase in regulation and risk management efforts and more volatile markets. This presents a huge opportunity for insurers to grab market share. Outsourcing will help them to focus on their core activities in a more aggressive manner.
Over the years the contracts with the third party service providers was more aimed at outsourcing of processes in support of closed books. But the agreement between Accenture and BNP Paribas shows that outsourcing is now coming to more front end functions than just the back office support processes alone.
This agreement was signed during a period which is characterized by saturated and matured insurance market. More over the major players in the insurance industry in the United Kingdom has been outsourcing the administration of books to service providers such as Diligenta.
Another insurance outsourcing player, Capita is at present struggling with the difficulties in managing large books of insurance business, which requires change in the existing technology associated with the administration of individual policies. This has opened up opportunities for other players such as Diligenta to improve their market share in the UK market. Diligenta is a subsidiary of TCS. Diligenta has entered into an agreement with Friends Life which long with the Accenture-BNP deal shows that European market has much to offer for outsourcing service providers.
The recent contracts indicate that there is still more cost savings possible for the Insurance providers in the European region by outsourcing business functions and new businesses to outsourcing service providers. So the exciting time is on for Life and Pension outsourcing market in Europe.