Insurance Post

Voyage of recovery

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In the same week that Norwich Union faced criticism regarding its 'aggressive' offshore recovery practice, Jonathan Swift visited its WNS team in Pune, India, to find out more about how the business is evolving

Enter the fourth floor of the Aviva office in Pune, India, and the first thing visitors see is a collection of white goods more commonly displayed on a game show. However, these prizes are not for contestants on a lame television programme but the employees in the WNS recovery team who bring in the most money - and the incentives do not stop there.

Employees can double or even treble their monthly salaries depending on performance, which is mapped out in full view of everyone in the shape of a cowboy-themed horse race, with staff either rated as 'runners' - on the track with a chance of winning prizes - or 'slackers' - those in the paddock and not on the course.

With this overt sense of competition being instilled among employees to encourage them to outperform each other, it comes as no surprise that some insurers have recently started openly bemoaning Norwich Union's stance on recoveries, claiming the insurer is being too aggressive and swamping claims departments with an unnecessary level of calls. A lot of these calls are coming WNS' outsourced arm in India, as it makes up half of NU's 700-strong recovery operation.

On the flip side, talking to staff in this department, it is interesting to hear their views on their UK counterparts. Some insurers known to be among the most put out by NU's recovery method are cited by workers as often being the most obstructive.

One employee notes that a Gibraltar-based motor insurer is infamous for keeping staff waiting for up to an hour, and then sometimes hanging up when the call is finally answered.

The staff in Pune are alert and wise to the quirks of the UK motor market, with Lloyd's and London market motor insurers coming in for some stick for doing their best to hamper recovery efforts. Other insurers are only phoned on certain days - with Tuesday and Thursday popular for some reason - because these are known to be the ones on which they write the cheques.

The results have been impressive from an NU point of view, with improvements in the past two years helped by process changes, which have seen staff numbers in the recovery team remain relatively static from a baseline of 260 in 2004 (15 staff were added in 2005) but increase the money they are bringing in sharply (see box).

The senior vice-president of operations in Pune, Paresh Sharma, explains that when it started in 2004 one major change from the way the business was previously handled in the UK was to alter the metrics on which staff were ranked, so it was based on how much they collected, rather than call levels.

Once the operation was up and running, it was also decided to change the process to make it more efficient, Mr Sharma explains, with staff divided into teams covering RIPE - the memorandum of understanding between motor insurers to speed up claims known as reduction in paper exchange - recoveries, non-RIPE recoveries, broker recoveries and inbound calls.

There are three non-RIPE teams and two RIPE teams, and each are expected to make 25 and 30 calls a day, respectively, from a central log of potential claims, of which members take ownership.

However, as Mr Sharma explains, it is the recovery levels on which their success or otherwise is rated. He says that staff can earn three times their monthly salaries - an annual salary is the region of Rs 160,000 (£2000) - by collecting four times the money they are targeted on from third-party insurers. He adds that one employee recently recovered £160,000 in a single month, significantly higher than the average of £38,000.

So what of insurers' gripes? NU customer services director David McMillan, who looks after the process from a UK perspective, retorts: "It is a case of devil if you do, devil if you don't. They are probably annoyed because we are being exceptional about it and collecting early.

"In the past, we may not have been as professional in terms of managing our cashflow, and it is important we do this better. We are collecting our money and, arguably, if we were not doing it in India we would be having to get slightly more aggressive about doing it in the UK."

Service level agreements

The WNS outfit has met 98.5% of the 137 service level agreements that were put in place when the deal was struck with NU, according to Mr Sharma, with the main failing point being staff attrition, especially among general insurance staff dealing with inbound calls.

This hit a year-on-year high of between 45% and 50% in September and October, up from an average of 40%. The attrition rates among life and healthcare staff at WNS are much lower (25% to 30%) but these figures give the offshore critics and unions some ammunition regarding the fact that these offshore centres are not the panacea some have claimed.

Mr Sharma adds that there are many job opportunities in the market, given the increasing number of outsourcing start-ups - some of which are relatively small 'mom and pop' operations.

He says that the other major problem is that WNS has trouble holding on to what he describes as "vintage employees", staff who have been with the company for more than 18 months - especially those that have been in a position for some time and are not reaping the remuneration they had hoped for.

However, Mr Sharma adds that this has not impacted its performance and that currently the top 35% of staff are responsible for 80% of the recoveries.

So despite the problems with staff retention, the six members of the recovery teams Post spoke to are enthusiastic. One employee, Rubina Shaikh from the non-RIPE team, outlined her ambition was to be the oldest member of staff in her division. She has been working there for two years and, at 21, may have some while to go to achieve this but sees Aviva as somewhere she could work for the rest of her life.

Ms Shaik regularly works five hours on Saturday to boost her earnings and complete her work, describing the general insurance part of the business, and particularly the claims side, as the most interesting in the Pune operation. She is also looking forward to finally being transferred into a fully fledged Aviva employee, rather than a WNS staff member who works for Aviva. This is due to happen in 2007, and she says it will give her extra prestige as WNS staff are seen as a call centre workers, while Aviva's are insurance company employees.

This trip was organised and paid for by Norwich Union.

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