 |
| Elips Offices |
| Elips delivers services to international clients from its two bases in Belgium (Brussels) and Luxembourg.
|
|
|
|
|
With Elips' TPA services, insurance companies unbundle traditional functions - in particular policy servicing and processing - to our dedicated service centre. By doing so, our TPA clients curb upfront fixed capital outlay on IT and reduce operating costs on in-force blocks of business. They also unlock or redeploy internal resources to core 'value generating' competencies, such as sales and future strategy.
Elips' TPA service targets a number of key clients:
- New entrants: mid-size companies wishing to enter a new market or to benefit from a country's liberal insurance regulation (e.g. Luxembourg);
- Problem-solvers:large companies seeking to resolve issues with problem portfolios ('run-off' portfolios, low-margin business inherited through a merger);
- Value-generators: niche companies which require access to the latest software capabilities but to not have the business volume to justify internal investment.
| |
| The business case for Elips TPA |
|
|
Question: What is a typical upfront time and labour cost for a life insurer to enter the market with a new product requiring new IT and processing capabilities?
Answer: Fixed capital outlay gravitates at around 1.5 to 2 million euros in the first year with an implementation lag of between six and twelve months.
How can Third Party Administration Help?
Elips' TPA service resolves what we call 'new product inertia' -the reluctance of insurance companies to enter new territories and launch new product lines.
With upfront costs escalating to seven figures and beyond, it is hardly surprising that mid-size and niche companies are cautious about launching new insurance products on the market. Furthermore, the burden of entering a new market - in terms of local knowledge, regulatory compliance and market research - encourages many insurance companies to remain defensive.
TPA helps answer questions like...- How can we remain competitive?
- How can we grow our business?
- How can we reconcile historical portfolios with the evolving demands of the marketplace?
By unbundling part of your administration and partnering with Elips' TPA service, you will convert fixed costs into a variable cost structure, thereby pegging your investment to the revenue you generate.
Our experience with TPA suggests that insurance companies can: - Shorten their break-even period from four to two years, and
- their full return-on-investment from five to three years.
| |
|
| About Elips's Third Party Administration Services |
|
|
Elips's Third Party Administration (TPA) service helps insurance companies in 3 ways:
- Elips's outsourcing professionals deliver in-depth knowledge of the local insurance market.
- They develop the business case for a portfolio of products, providing you with predictable costs, realistic targets for new business and/or cost savings on administering existing business.
- Finally, they act as the outsourced implementers and administrators of a dedicated set of software solutions to service your front-, middle- or back office.
Although the precise nature of Elips' TPA services vary from client to client, projects typically fall into one of 3 patterns:
- A partial service aimed at simplifying the 'archaeological layers' of old yet in-force business (run-off policies, portfolios inherited from mergers etc.) with a view to curbing costs or packaging business for sale to a reinsurer. Elips offers ASP (application service provider) services to provide your staff with remote access to dedicated software, or full administration services that release your staff from day-to-day management tasks.
Key clients: large insurance companies, newly-merged entities, niche companies seeking partnership with larger insurance groups; brokerage 'umbrella' organisations
- A shared-service centre to consolidate common servicing and management activities across a network. For example, a central processing resource for merged entities, subsidiaries, brokerage channels, etc. Besides consolidating investment - for example with regard to data storage, network redundancy and backups, performance tuning and security - these service centres act as a clearing house for all knowledge and administration tasks relating to the portfolio(s).
Key clients: large insurance companies, newly-merged entities, strategic insurance industry partnerships
- Fully outsourced administration, where Elips offers end-to-end integrated IT infrastructure for policy management, archiving, reporting, documentation and customer service. This service is becoming increasingly popular for insurance companies that are shifting their internal strategic focus away from simple 'execution' of policy administration and towards value-generating parts of the business, such as sales and marketing, M&A activity and new product development.
Key clients: subsidiaries of insurance companies in new territories; niche insurance companies; mid-size insurance companies
| |
|
| The industry consensus on Third Party Administration |
|
|
Recent studies into the insurance industry (A.T. Kearney, Accenture, IBM) suggest that among insurers 37% of 'controllable expenses' are estimated to be centred on servicing and processing operations. The time-consuming and costly operational burden of existing business can mean that insurers are distracted from executing strategies which focus on future advantage. Imagine a yacht trying to race forward with its anchor still scraping the sea floor.
| Figure 1: The Processing and Servicing aspects of operating expenses account for 37% of costs. By outsourcing tasks in these areas, total operating expenses can be reduced by between 12% and 25%. |
Furthermore, a combination of industry mergers, governmental regulation and evolution in product offering means that insurers typically incur significant expenditure on old or 'negative value' business: run-off portfolios, archiving of policy-related contracts and documentation, incompatible IT systems, etc.
TPA services and technology, such as those offered by Elips, release insurers from disproportionately costly - and always laborious - servicing and processing tasks.
| |
|
Need more information? Simply  Contact Us for
an exclusive appointment to discuss your exact requirements.
|
|
|
Reduce time and labour costs
|
 |
Enter new territories, launch new products with maximum speed and with minimum fuss
|
|
Gain immediate access to state-of-the-art IT capabilities
|
|
Leverage TPA capabilities to evolve product lines and processing
|
|
Move from fixed capital outlay to variable costs, based on the volume of new business generated
|
|
|
| Examples of products supported by Elips technology |
| Group products |
Defined contribution plans
|
|
Cafeteria plans
|
|
All-in budget plans (including taxes)
|
|
Risks: death, disability, accident, waiver of premium, healthcare, orphan annuity
|
|
Defined benefits: step rate, widow annuity,offset, etc.
|
|
|
| Individual products |
Deferred capital
|
|
Unit linked products
|
|
Universal Life products
|
|
Life insurance
|
|
Annuities
|
|
Endowment plans
|
|
Insurance bonds
|
|
|
|
© 2004 Elips. All rights reserved.