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Shared Service Centers for Insurers

2012

Insurers have a lot of catching up to do in the efficiency of their internal organization. This need is especially striking in the Shared Service Center (SSC) area.

Mergers of organizational units that perform comparable tasks into a central, group-wide unit, an SSC, are fairly uncommon in the insurance world. Only around 28% of insurers have bundled their finance and accounting activities in a single unit; the comparable figure across all industries is well over 60%. That is, basically, an incomprehensible state of affairs, given that centralized units can operate at high levels of efficiency. That is a fact of which even insurers themselves are aware. In the Roland Berger study ("Shared Service and Competence Centers for Insurers") European insurance groups themselves said that SSCs can achieve cost savings of between 10% and 16%.

Standardization and consolidation of services in a central, newly established unit also has an effect that goes beyond the mere cost factor. Standardized and therefore at the same time more transparent processes also make a more focused control and allocation of services within a group possible. Personnel department services such as further training courses are a case in point. They can be charged more accurately in terms of their users and the amount of use that is made of them rather than, as in the past, on the basis of a fixed allocation key. An improvement in internal processes can also have positive external effects, such as a better product quality.

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