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October 16, 2006
Accenture Survey Finds European Insurers Embracing Industrialized Operating Models

“Industrialization” is a priority for 92 percent of insurers

LONDON; Oct. 16, 2006 – Large European insurance companies are widely embracing industrial operating models in order to cut costs and improve customer service, according to an Accenture survey of senior executives at 30 of the top 100 insurers in Europe.

The survey revealed that a sweeping majority (92 percent) of respondents see "industrialization” – the use of standardized operating and production platforms akin to those used by manufacturers – as a high priority today, and all respondents expect it to be a priority in the next three years. When asked to specify the anticipated benefits of industrialization, respondents most frequently selected cost reduction (50 percent), improved service quality (25 percent) and better risk management (20 percent).

“Our research shows that a dominant and growing number of leading European insurers not only recognize the importance of industrialization, but are openly embracing it,” said Serge Callet, managing director of Accenture’s Insurance practice. “By applying the proven strategies of successful manufacturers, these insurers can reduce costs, simplify internal operations and increase their differentiation in the marketplace. Indeed, efforts among European insurers to transform, simplify and maximize the automation of back-office processes like finance and accounting, and front-office processes like underwriting, policy administration and claims are rapidly transforming the operational landscape.”

Two-thirds (66 percent) of respondents said they expect their front office to be “largely automated” in three years, while less than a quarter (23 percent) said the same of their front office today. Back-office functions, such as administration and finance, were described by more than 80 percent of survey respondents as being “more automated than manual” today. Back-office processes accounted for six of the 10 most automated functions cited by respondents.

The survey findings indicate that the number of insurers that co-source or outsource core insurance processes such as policy management and premiums collection could triple within the next three years, from 11 percent today to 33 percent in 2009. Based on Accenture’s “industrialization index” – which measures degrees of automation against levels of sophistication of each process – the most-industrialized insurers in the survey were roughly three times more likely than the average insurer to co-source or outsource their claims settlement processes (22 percent vs. 8 percent, respectively) and premiums collection processes (25 percent vs. 8 percent, respectively).

“With significant levels of back-office automation having been achieved in recent years, we see a new wave of industrialization coming to key front-office functions, such as underwriting, policy administration and claims management,” said Callet. “Our research indicates that the front-runners in this wave are distinguished by their use of alternative sourcing strategies – such as co-sourcing and outsourcing – as a lever to accelerate industrialization. This is a key trend in insurance similar to what has occurred in the auto manufacturing industry, where co-sourcing and outsourcing have become standard industry practices since their introduction in the late 1980s.”

Respondents included senior executives at 30 of the top 100 property and casualty, life and multi-line insurers in European countries, including France, Germany, Italy, Netherlands, Scandinavia, Spain and the United Kingdom. Eighty percent of respondents represented insurers with annual revenues above $1 billion and 20 percent represented insurers with revenues between $500 million and $1 billion. Interviewees were selected on the basis of their role as decision makers and influencers on corporate strategy or development, and included chief executive, financial and operating officers, strategy directors, corporate development directors, and business-line director-level executives. Interviews were conducted by phone or in person between May and July 2006.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company. Committed to delivering innovation, Accenture collaborates with its clients to help them become high-performance businesses and governments. With deep industry and business process expertise, broad global resources and a proven track record, Accenture can mobilize the right people, skills, and technologies to help clients improve their performance. With approximately 140,000 people in 48 countries, the company generated net revenues of US$16.65 billion for the fiscal year ended Aug. 31, 2006. Its home page is