Insurers are entrusting an increasing proportion of their insurance portfolios to management delegates. According to Christophe Burlot, co-founder of Apidata, maintaining full control over data is crucial to keeping a firm grip on risk management. Outsourcing can be a source of added value, provided the processes are industrialised.
Today, we are seeing a significant increase in the share of the delegated management market. What is driving this trend?
Christophe Burlot: Several factors are contributing to this trend. Better ROI management of management costs, an already well-established multi-channel distribution network, and the need to focus on core business activities—controlling its commitments—through its key functions: actuarial, internal control, compliance and risk management. Risk carriers are also inclined to standardise their products, aided by the standardisation of the general regime. As management operations become increasingly standardised, they are less differentiated in terms of customer satisfaction than they used to be. This shift, which involves transferring the technical expertise of back-office operations to specialised operators, offers the advantage of freeing up budgetary margins to contain, or even reduce, management expenses.
However, outsourcing is not without risks. Are insurers fully aware of this?
Indeed, the risks are real, including the potential loss of know-how or a disruption in the relationship with the insured. But the most alarming and often underestimated risk is the loss of data control. To build a guarantee with the right pricing and adequate provisioning, insurers must have a highly accurate view of all their activities. Outsourcing should be regarded as a process that is just as complex and manageable as internal operations. Today, we still see insurers struggling to effectively control outsourced activities, largely due to a lack of organisation and data management. As a result, they lose control of part of their portfolio, which becomes difficult to regain given the sheer volume of data involved.
How can insurers maintain control over their data, and therefore, their risks?
Delegated management must follow a well-structured, qualitative, and quantitative approach. Not all management delegates operate in the same way. It is up to the insurer to set the framework that allows them to remain in control of their management. This involves implementing a set of rules governing process controls, the technical and regulatory environment, as well as reporting standards. Once they have access to all the information they need to manage their guarantees and risks, there is no longer any reason to distinguish between outsourced and in-house management.
What role does Apidata play in this process?
Our Middle Office solution ensures compliance with all the management rules established by the insurer. It not only allows insurers to grow more easily, but also enables them to regain control and oversight of their portfolios. Regardless of how the data has been processed by different management delegates, the insurer can access, audit, manage, and enrich it with their own references, and integrate it—once qualified—into their financial and technical systems automatically. This greatly simplifies the insurer’s work, allowing them to manage their risks securely and confidently.