Life offices will have to wake up to the need to outsource parts of their business to survive the chan- ging market, warns former Abbey Life managing director Chris Evans.
Speaking at the Unisys conference last week, Evans based his comments on the experience of Abbey Life which outsourced all its admin to Unisys following its closure to new business in 2000.
Evans, who is taking a gap year after leaving Abbey, believes the environment of low margins and increasing customer demands means companies will have to stick to their core competencies to survive, believing it is the only way they will meet the challenges of the changing market.
He said companies not considering outsourcing run the risk of not being able to innovate, not having flexible operations and not giving value to clients and shareholders.
He believes many firms do not consider outsourcing as a part of their long-term business strategy because managers fear it will bring uncertainty and a loss of control. He said they fail to realise the benefits, such as avoiding having to invest heavily in technology.