Three technology firms in the life insurance industry have announced a new “working relationship” that they say could reduce current policy administration costs “by more than 30%.”
The new “entity,” dubbed Vive-Life, brings together Indianapolis-based Vector Technologies, ProcessMind of Bangalore, India, and VerticalPoint, Inc. of Colorado Springs, Colo.
According to Harold Apple, CEO and founder of Vector, the new offering is “a service productthat is actually a product of Vector” that is enhanced by offerings from the other companies.
Vector provides policy administration software and associated counseling services, ProcessMind supplies offshore programming resources, and VerticalPoint provides a rules-based underwriting system, the companies say.
“The data we have show that average policy administration costs per in-force policy [among U.S. life insurers] have surpassed $200,” says Apple. He says the administration segment of that cost has seen a slower rate of increase than the information technology segment.
According to a report from TCi Consulting & Research, based in Cresskill, N.J., life insurer IT budgets decreased from 5% of projected revenue in 2000 to 4% in 2001.
“We look at these numbers, and also the trend for companies to turn to business process outsourcers, and a clear opportunity for saving money is presented,” says Apple. He claims insurers are moving toward outsourcing business processes because of the need to achieve process cost reduction and the desire to focus on core competencies.