INSURANCE

Insurance carriers that do not have a structured Procurement process in place are potentially losing out on 10% to 25% percent savings on their spend with external third party suppliers.

PROCUREMENT’S POTENTIAL TO DRIVE STRATEGIC VALUE FOR INSURANCE COMPANIES

  • The Insurance industry has traditionally lagged significantly behind other industries such as manufacturing, retail, industrials and energy & utilities when it comes to Procurement. With increasing financial pressures and emergence of cyber-attacks, Insurance carriers have started looking for ways to optimize costs and mitigate risk with third party suppliers. This has brought the procurement organization to the forefront. There are numerous challenges in developing an effective Procurement program for Insurance carriers. Suppliers are usually deeply embedded within the Insurance carriers core processes, making it difficult to switch suppliers while maintaining high level of customer service and ensuring a hassle-free customer experience for policyholders.
  • Insurance carriers should adopt a comprehensive, structured and collaborative Procurement process when addressing their supplier spend. The process should include detailed data collection, benchmarking & supply market analysis, RFP development, vendor screening and evaluation, third party risk assessment, negotiations and total cost analysis for supplier selection and contracting.

VALORANT’S PROCUREMENT SOLUTIONS DELIVER SAVINGS IN KEY CLAIM CATEGORIES

  • Valorant has extensive experience of working with insurance clients using a structured Procurement process to optimize costs. A robust Procurement program will help insurance companies achieve sustainable cost reductions while also improving the service experience for customers. We have helped our clients achieve significant savings in key claims categories, such as estimatics, claims litigation, independent adjusters, appraisers, salvage, subrogation, car rentals, vehicle auction services and independent medical exams, by adopting this approach.

VALORANT HELPS INSURANCE COMPANIES ALIGN THEIR CONTRACT TERMS TO INDUSTRY LEADING STANDARDS

  • We often see that supplier contracts are not well managed by Insurance carriers. A lot of supplier contracts don’t have all of the key clauses included such as: Data ownership, Cyber Insurance, Indemnification, Termination for Convenience, Termination Assistance, SLA’s and KPI’s. In Valorant's experience, it is also not uncommon for insurance carriers to have numerous contracts in place with the same vendor across the organization. By consolidating these contracts into one single enterprise-wide contract, the spend can be leveraged to achieve rebates, even for services that are individually not purchased at scale. Discounts can also be negotiated for any spend above the target spend and rebates can be received at year end. In a typical insurance carrier, active monitoring of contract performance can result in up to five percent reduction in the overall procurement costs. Contracts must be reviewed holistically to identify the costs & hidden charges associated with them

THE OVERALL BENEFITS OF VALORANT’S SOLUTIONS INCLUDE

  • In Valorant's experience, implementing a robust sourcing and procurement program can deliver savings of 10% to 25% for Insurance carriers while also providing the following benefits:
  • Reduced risk through better supplier contracts
  • Visibility into enterprise-wide spend
  • All supplier contracts stored in a central repository
  • More informed decision making by business unit stakeholders
  • More predictable operating expenses
  • An effective Procurement program will not only help Insurance carriers reduce costs, it can also increase customer service as many suppliers engage directly with policyholder and play a critical role in the overall customer experience. In doing so, Insurance carriers can not only reap the benefits of an improved bottom line but also expect to see top-line growth.