Life and Pensions (L&P) Insurance BPO Annual Report 2020: Escape Legacy and Embrace Digital through BPaaS

24 Jan 2020
by Akanksha Sohil, Somya Bhadola

With CXOs acknowledging the need to move away from traditionally siloed, inefficient, complex, and non-customer-centric business models, the Life and Pensions (L&P) insurance industry is undoubtedly on a progressive journey. L&P insurers are increasing their budgets toward projects that deliver digital-led transformation in pursuit of superior experience for the end customer.

While their priorities are in the right direction, most L&P insurers find that their ability to modernize their businesses or operations is fairly limited, primarily due to two reasons:

  • Existing legacy systems or traditional technologies require complex projects for integration with modern architectures/databases/technologies, and, at times, the integration is not even feasible. Additionally, moving away from such systems is usually not practical, given the high sunk costs and potential disruption to business continuity
  • Insurers’ continued operations on legacy systems drive high maintenance costs, in turn constraining them from allocating requisite resources toward digital transformation
  • To address such restrictions and accelerate their digital transformation agendas, L&P insurers are now partnering with IT/BPO service providers in a BPaaS model to reduce the risk they undertake for core modernization and convert their capital expenditures into operating expenses. However, such large-scale investments need to be sufficiently customized to insurers’ product portfolios, with not all books of businesses requiring extensive modernization. This report explores the state of BPaaS adoption in L&P insurance, recommends legacy architecture modernization, and discusses the business factors that impact the extent of modernization required.


    Insurance - Business Process Outsourcing (BPO)


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