Ganesh Pai is the SVP & Head of Insurance Market Unit at MphasiS and is based out of Chicago, U.S. In this role, he is responsible for all aspects of the business including industry strategy, revenue, profitability, go-to market, solution portfolio, sales and client relationships. Ganesh has been with MphasiS for 15 years and has played several key roles across the globe.
With over 22 years of experience in the IT industry, he has been responsible for establishing strategic outsourcing relationships with Fortune 500 corporations across the globe. He has launched new and innovative service offerings in the U.S. markets, spearheaded the effort for setting up and growing the insurance business at MphasiS and more recently, successfully led two M&A transactions involving the acquisition of a captive IT organization of a global insurance company and Wyde Corporation.
There is a lot of progress that has been happening in our enterprise business units and insurance is one of the few chosen verticals in which we are looking at both life and amenities as well as property and cash segments of the industry. For both segments we provide IT and BPO assistance, which is an end to end responsibility. About 11 percent of the company’s revenue comes from this business unit.
In 2011, the insurance industry as a whole has taken a hit because of all the natural calamities— the tsunami and hurricanes in both Japan and U.S. Every time there is a natural calamity in any part of the world, the losses are very high. But despite this, the insurance industry is getting back on the track.
Traditionally for the insurance companies, regardless of these losses their profitability has never been an issue because the investment environment has been lot more stable. The main source for their income is the investment income. Whatever premiums they collect they set it aside for the losses and the rest they often invest. The investment scenario has put a lot of pressure on the investment companies. The forecast for 2012 is that the IT and Operational areas expect a marginal increase in spend. In general, most of the insurance companies spend between 2.5 to 5 percent of their revenue towards IT and Operations.
Key trends in the industry
Key trends we are observing are focus on customer retention, operational efficiencies, driving down operational spends and making the distribution channel more efficient. Companies today, especially those in mid-tier section, are looking at how best they can use outsourcing and off shoring to increase productivity and lower the costs. The larger companies have been doing it for over 10 years and hence, we have been getting benefits from it.
The insurance sector today has emerged as a leader in terms of adoption of new technologies Historically they have not been that way and always followed their peers in financial services but now this segment is leading the way for other verticals.
Market opportunities and challenges
Penetration of insurance as a product has shifted from developed to emerging markets. India today is being seen as a growth market because not everybody here carries insurance. The potential of people buying insurance here is much higher. U.S. is more of a saturated market for most players in this vertical. In developed markets, innovation would mean, what new product or user segment can they create and how quickly they can launch it to the markets.
The biggest concern for our clients in developed markets is that most of the IT systems are articulated. Typical life cycle for any core insurance platform is between 15 and 20 years. Most of the systems being used today were perhaps implemented at least 10 years ago and are not flexible enough to make changes in. The challenge here is 'how can companies migrate their functions to new platforms seamlessly and create new products.
The second challenge today is to automate the entire insurance process. Historically, insurance companies especially in the U.S., have always used agents to sell their products.
It is only in the last 10 years, after the advent of the internet, that direct channels have been sought after. While insurance agents are fearful and against the usage of internet as a direct sales channel, the customers on the other hand are demanding self service and empowerment similar to that provided by banks.
Consumer today can manage their bank accounts, do money transfers, pay credit card bills and more via internet and they demand the same experience from insurance companies too. The challenge is how do companies meet the end customer’s demand without threatening the middleman who is bringing in this business.
Strategies & Challenges as service provider
Since indentifying ‘Insurance’ as one of the business verticals for MphasiS, focus has been on finalizing our industry strategy. We had to check if there are any segments within this industry where we had to stay focused on; where we could invest in building our capabilities. In order to do so, we had spent the initial months to bring in domain experts with in the team. We followed analysts reports to understand the market scenario and align our strengths with were the industry potential was.
Our next strategy was hyper specialization and focus on select domains to build strong and differentiated value propositions which would help customers with direct tangible business benefits. Initially we identified three domains to begin with i.e. policy servicing, claims and billing. This year we also added insurance sales modernization as one of the new domains and are proactively working with clients.
Six months ago we acquired Wyde Corporation who catered to a widespread customer base, including mid-market insurers across the U.S., France and Canada. Their technology offerings were in alignment to the domain areas of our interest and by merging our service offerings, we are now able to allow our customers to pick and choose from different modules available depending on their needs.
Additionally, we are now building our entire services capability around the Wyde’s platform and taking to market a very domain focused solutions that will deliver direct value and benefits to our customers. For example, we are started by offering billing as a solution but now we are providing the same as a service over a public cloud and along with BPO and IT capabilities.
New Markets of Interest
U.S. continues to be core market of interest for MphasiS. Since the beginning of 2012, from a macro economic stand point, U.S seems to be on a recovery mode. This apart, we are looking at the European regions, UK islands and France as new areas of business, thanks to the strong presence of Wyde there. Emerging markets such as India, SriLanka, Indonesia and few other countries in Southeast Asia are also of interest for us but are yet to expand our presence here completely.
From services standpoint, billing-as-a-service has garnered a lot of traction amongst our clients. We first launched it in the U.S. and are replicating the same in other markets as well. In India, the launch will happen in April this year.
The other solution we are focusing on is the sales modernization. A traditional insurance sales cycle takes about a month or two starting from the point a policy is sold to the customer; verification at company’s office, the data inputs and integration, to final confirmation and activation of the policy. To reduce this time frame, we have developed a unique solution. Every field agent is provided with a digital pen that has two small cameras and is capable of taking 150 pictures per second. As and when the forms are filled, the pen captures the image and sends the information to the company’s office in real time, eliminating the need for a human to sit and transfer the information from paper to computer as done traditionally. By building and integrating verification software into the backend system, the data sent is verified, post which the applications are processed. This technology has invariably cut down a four week cycle to 10 days.