There are two big trends in the insurance industry regarding technology that are going to be dominant in 2015. The first is the overall sense of urgency that insurance carriers around the world are feeling that to stay competitive they must invest in business process automation technologies and capabilities that enhance the customer experience or suffer the consequences of being laggards. The second is that organizations of every size are continuing to look to outsourcing leaving the complexity of technology to trusted partners.
Illustrative of both trends is the announcement that IBM has announced that one of India’s larger insurers, Birla Sun Life Insurance (BSLI), the life insurance arm of the Aditya Birla Financial Services Group, has signed a nine year IT outsourcing deal with IBM. The stated objectives are to:
- Consolidate, redesign in-scope applications and use analytics to provide client insights that build competitive advantage.
- Leverage mobility and cloud solutions developed by IBM Research and the IBM India Software Lab to achieve increased revenues, reduce costs and enhanced profitability
This is a deal that is worth keeping an eye on. The partners are saying that the contract will be, “A first-of-a-kind technology solution to the insurance sector that will radically transform the business technology model.” They further elaborate noting that BSLI will, “Leverage IBM's business consulting, application development and maintenance services to drive process efficiencies and transform the business towards better outcomes for customers and employees. Tailor-made solutions from IBM will bring process maturity best practices, IT portfolio consolidation and introduce innovative tools.”
In comments about the contract, whose terms have not been disclosed, Mayank Bathwal, Dy. CEO, Birla Sun Life Insurance said, "We at Birla Sun Life Insurance are committed to offering an enhanced experience to our customers while improving on efficiencies and profitability of the business. We believe that this winning partnership with IBM will help us excel and stay ahead of the curve in this fast evolving life insurance industry, while addressing all business needs IBM's vast experience and technology capabilities will add tremendous value to our business."
"IBM remains committed in the transformation of the BFSI industry catalyzing growth and inclusion. We are pleased to partner with BSLI to help leverage leading technology solutions like cloud and analytics to make critical strides in achieving business transformation, improving service delivery and increasing customer satisfaction, “said Vanitha Narayanan, Managing Director, IBM India. "We will bring our local and global expertise and capabilities to fuel BSLI' expansion and growth in this dynamic Insurance industry in India." she further added.
The life insurance business, as with all lines of business in the insurance industry, is being buffeted by an acceleration of competitive options, including from aggressive online start-ups. It is thus not surprising that established insurers regardless of their vertical market or for that matter region of the world are turning to outsourcers for their technology and expertise. As noted this is not a surprise and this year is likely to be a good one for such deals. What is impressive and somewhat surprising is the length of the contract. It will be interesting to see if such long-term deals are the norm or the exception.
Edited by Maurice Nagle