The soft insurance market and increasing sophistication overseas is pushing more and more claims management operations to offshore hubs, a major insurance convention has heard.
Peter Newall, Swiss Re Corporate Solutions Head of Claims for Asia Pacific, this told the ANZIIF Claims Convention there were currently many competing pressures on claims.
“Commercial insurance rates are decelerating and reinsurance rates are declining,” he says. “It is not really a healthy market at the moment.
“All of this rebounds on claims, in that insurers – in order to be competitive – do not want in any way to compromise their settlement values because that’s what drives their business.
“So the claims service providers are required to give better service but cheaper.”
Newall says people tend to think of offshoring operations as little more than call centres but the capabilities of workers in those countries is rapidly increasing, with India in particular now able to provide economic and underwriting research, as well as vast levels of business support.
“The industry is tight-lipped on what they are doing there but the industry in India in turnover terms is valued at about US$80 billion. Of that, a quarter is in business processing,” he says.
“The issue here is that we are losing a very educated pool of labour, which is capable of doing meaningful tasks, upgrading and doing more complex tasks.
“There are life and health claims that are shifted out to India that can be processed in India quite simply and more straight forward. There is no reason why property or casualty claims could not be shifted out to India.
“There is still room for claims management in the country where the business is written but in the future it obviously has to be a lot more efficient than in the past.”