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Insurance Agenda - EY - Australia

Global Consumer Insurance Survey 2012

Global Consumer Insurance Survey 2012

Insurance giant chooses integrated Asia-Pacific FSO teams

Our reputation as the most globally integrated professional services provider is earning success in Asia-Pacific. It was one of the reasons why insurance giant Prudential appointed an integrated global Financial Services Organization (FSO) team including Asia-Pacific colleagues from Hong Kong and Singapore to assist in its response to the US Foreign Accounts Tax Compliance Act (FATCA).

How to address FATCA is an issue facing many clients and targets across Asia-Pacific and globally. It's a new legislation that requires affected financial institutions to identify their customers and prove whether or not they are US citizens. Our joint Advisory and Tax approach to helping clients comply with FATCA, along with our ability to provide an integrated global team, was an important factor in winning the assignment with Prudential, which has operations in 10 markets across Asia-Pacific.

"By teaming across Tax and Advisory in Singapore and Hong Kong, as well as with our FSOs in EMEIA and Americas, we were able to demonstrate to Prudential how our integrated global network matched their global needs," says Insurance Practice Leader, Asean, Graham Handy.

In this edition of Insurance Agenda, we highlight five critical areas that management should address in order to successfully implement an outsourcing strategy. From ensuring you have a strategic rationale for outsourcing through to being aware of the pitfalls in executing your outsourcing strategy. We have also included a link to a report we recently prepared, in conjunction with The Institute of Chartered Accountants in Australia, discussing 20 issues on outsourcing and offshoring.

Enjoy reading and please use our tools and resources to help you remain at the forefront of topical local and global industry issues.

2011 was a tough year for insurers and with slow economic growth, low interest rate and changing capital requirements; 2012 will continue to be a challenging one. To combat these challenges and put their profitability on a firmer footing, management is turning its attention to cost reduction initiatives.

We see a growing trend of reducing costs through outsourcing of various functions including aspects of finance, claims and IT. Concurrently the outsourced market has developed significantly with a wide range of providers able to meet this increased demand.

The five areas that are critical to making outsourcing a success for insureres include:
  1. Be clear on the strategic rationale for outsourcing
  2. Determine what to outsource
  3. Choose where to locate
  4. Be aware of the pitfalls in execution
  5. Understand that regulatory responsibility cannot be outsourced
In the following sections we briefly discuss each of these areas and highlight the fundamentals that you need to get right if you are to make outsourcing a success.

Please feel free to request a copy of any of these publications and as always we welcome your feedback.

Paul Clark
Paul Clark
Asia Pacific Sector Leader, Insurance
Phone: +61 2 8295 6967

Capital, risk and regulation Operational effectiveness Customer
Risk and capital management functions are facing significant challenges. Against a wave of regulatory reform and highly uncertain macro-economic trends, getting the right balance between capital levels, ROE and growth has never been more important. Insurance companies around the globe are refocusing their efforts to improve overall operational efficiency, squeezing costs out of the system without impairing the overall customer service experience. In an intensely competitive and capital constrained market, attracting and solidifying customer relationships is central to achieving sustained growth.

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