Business process outsourcing (BPO) companies such as Infosys BPO, Patni’s BPO arm, EXL Services and Genpact are increasing their focus on providing highend actuarial services to insurers in the US and UK. The Indian IT companies, which have been hitherto providing back office services (claims processing and others), are now planning to provide actuarial valuations. Genpact, one of the largest players in the property and casualty space has been in actuarial services since the last five years.
Mohit Thukral, senior vice-president and business leader, Genpact, said, “In the last 4-5 years, the demand from these markets has doubled. We started with just 10 people and today have a base of 60-70 acturials and students.” Actuarial processes constitute the extreme complex end of the knowledge process outsourcing (KPO) space. Actuaries are professionals who design insurance policies. They assess the financial consequences of unforeseen events and the premiums needed to cover the risks. The Indian offshoring industry is particularly strong in this area.
The total estimated revenues from Indian offshore insurance business process outsourcing (BPO) services were expected to rise from $790 million in 2007 to about $2 billion by 2010. Employment is also likely to increase from 41,600 to 1.5 lakh in 2010. “One of the key reason for work coming to India, other than mature practices, is the shortage of skill-sets. An actuary in US with 5-6 years of experience gets a package of $150,000-250,000 and a acturial student will draw about $70,000-125,000 a month. When the same work comes to India, the cost saving is almost half,” added Thukral.
Patni Computers, which started an actuarial process outsourcing (APO) unit around two years back, has three US insurance companies as its clients and a 125 member team who do actuarial valuations. According to Sanjiv Kapur, senior vice president and head of Patni BPO, “70-80 per cent of the work done at Patni BPO is financial services and insurance. The gamut covered includes life, health, property and casualty insurance.” Sheshadri BC, SBU head Insurance Health and Lifescience, Infosys BPO, added, “We are actively talking to a few players in the life insurance segment.” Infosys BPO has been working with an insurance player for the past one and a half years and provides analytical services.
Another player, EXL Services is also keen on providing actuarial valuation services. “We have seen an increase in demand. We are currently providing analysis and plan to enter valuation services as well,” said Rohit Kapoor, president, EXL Services. Paternoster, UK’s insurance company set up in June, is making a conscious effort to get Indian actuarial talent. It wants to introduce new thinking as traditional methods of computing life expectancy are off the mark.