PROCUREMENT 2.0 IN INSURANCE: FROM A BACK OFFICE FUNCTION TO A STRATEGIC VALUE CREATOR

White Paper

INTRODUCTION:

  • Insurance carriers are missing out on an opportunity to improve their expense ratio by 1 – 3%, due to a lack of maturity within their procurement functions. For these companies, procurement’s role is typically limited to rubber stamping contracts and sending PO’s to suppliers. In turn, this creates a culture where Procurement is seen as a back-office function, whose role is purely transactional.
  • Some of the key pain points faced by insurance carriers include:

Process

  • No standard Procurement process for engaging with suppliers for contract renewals and negotiations
  • Not leveraging their enterprise wide spend during negotiations with suppliers
  • Lack of contracting & negotiating best practices which result in sub-optimal supplier contracts
  • No standard process for supplier relationship management, often without any monitoring mechanism

People

  • Non-procurement professionals performing procurement activities (i.e. hobbyists)
  • Lack of end-to-end procurement skills including negotiating and contracting
  • Lack of ongoing vendor management skills post contract signature

Tools

  • Poor quality of information on how much is spent with each supplier
  • Lack of a centralized contracts database or "proactive" contract management tools
  • Lack of best-in-class RFP documents and contract templates

PROCUREMENT TRANSFORMATION: HOW TO MOVE TOWARDS A BEST IN CLASS PROCUREMENT FUNCTION

Valorant's proven procurement transformation approach is supported by effective change management

  • Valorant has extensive experience in transforming procurement functions for insurance carriers, from a transactional department to a key enabler of corporate strategy. We bring the expertise, tools, templates, best practices and benchmarking information to help transform your people, processes and tools to best-in-class. We support the procurement transformation journey through effective change management which is key to the success of the program. Additionally, we also set up effective governance & reporting mechanisms to ensure sustainability.

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  • Download full PDF report to know more about how Valorant can help you to transform procurement at your organization

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