By Tom Murray, Head of Product Strategy, Exaxe.
Interest in outsourcing the administration of life and pension books is growing rapidly. The reason is because of the benefits it brings to the life and pension provider. Specialist administrators remove the hassles of administration from the life and pension companies, leaving them free to concentrate on the manufacturing of their products.
The outsourcer’s expertise lies in creating optimal business processes that enable increased efficiencies to be translated into lower charges for consumers and better services as well. The benefits of scale that the outsourcers manage to achieve means that small improvements can allow for far greater benefits in terms of cost control.
It all sounds great, but one of the difficulties for arranging a successful outsourcing is the initial setup phase. Outsourcers wish to run the systems more efficiently in order to provide a better service at a lower cost. One of the biggest problems in achieving this is the plethora of spreadsheets that are part of the handover package.
When the outsourcing agreement is negotiated between the outsource company and the life and pension provider, attention tends to focus on the big books of policies that are running on the various legacy systems within the life and pension provider. Little thought ends up being given to the numerous smaller banks of policies that are being run on old, small databases with all the calculations being carried out on interconnected spreadsheets that have long outgrown whatever usefulness they may once have had...
Read the full article in the Actuarial Post: Actuarial Post - Edition 25
Actuarial Post is an online publication offering actuaries insight into the market, an extensive library, news and the latest job listings. With a dedicated comment section; the most talked about topics in the actuarial market are discussed by actuaries dealing with the issues on a daily basis. Articles focus on the latest trends changes in regulation and the areas of pensions, investment, life and insurance.
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