A lack of strong management, capable of facing the myriad of challenges facing the industry, is one of the biggest problems facing insurance companies locally and abroad. But a shortage of senior managers can be mitigated by outsourcing non-core functions to subject-matter experts.
This is according to Pule Mokoena, group executive of marketing at Innovation Group, who adds that it is very difficult for insurance companies to afford the appropriate senior management, while the clever outsourcing of non-core functions gave insurance companies economies of scale.
Speaking at the launch of the Inaugural Insurance Banana Skins, Barry Stott of PWC said the lack of quality management at insurance companies was the third most serious threat highlighted by a total of 139 companies, representing 21 countries. It was the biggest threat identified by insurance brokers.
Too much regulation was the biggest global threat facing insurance companies. Stott said the steady flow of new laws and regulations is heaping on costs for insurance companies. Management is also being diverted from running the business.
Innovation Group’s Mokoena explains that this is why insurance companies need to increasingly look at outsourcing non-core activities and processes to specialist outsourcers.
“There is a crying need for market-leading technologies – and this is why companies like Innovation Group exist on the dimension between BPO (business process outsourcing) offerings and enterprise software.
“This enables businesses to outsource, thereby receiving better management information. This increases the client’s control – rather than decreasing it – during an outsourcing agreement.”