Life Insurance | Market, Trends, Growth | Suppliers Analysis

Strategic Sourcing Guide to Life Insurance Procurement

Overview

A changing ecosystem within the Financial market also affects the procurement process, cost dynamics and supplier attractiveness for the buyers of Life Insurance. Suppliers are increasingly offering a 'bundle' of services which is marketed as a cost saving option. The bundled offering often includes services that are not required by the buyer or are charged at a much higher rate than an A la carte option with another supplier.

More and more buyers of Life Insurance are looking to engage suppliers who adhere to lean principles of business operations in a bid to receive services and resources that are highly optimized and insulates in part from cost overruns.

Lack of skilled in-house manpower continues to be the largest factor for hiring of Life Insurance.

Life Insurance Procurement Best Practices

Sometimes, procurement functions are unable to timely alter their practices while responding to market conditions. Industry experts acknowledge that periodically reviewing procurement best practices and adopting learnings from across procurement categories can help procurement teams respond to market needs in a more agile way. This report combines our experience of other categories with Life Insurance procurement insights and hand picks best practices that can work for category managers delving in this market.

For example, Cost saving opportunities may reduce exponentially in relation to the time left for current contract to expire or required timeline to start the engagement. Therefore sufficient interval should exist between initation of new procurement and expected start date of the new contract for Life Insurance.

Adequate RFP response time should be built in for prospective suppliers to enable them understand the scope and performance requirements.

Buyers should set a baseline against which the performance of suppliers can be benchmarked along with setting measurable/quantifiable KPIs. Defined KPIs provides suppliers with clarity on the scope. Besides setting standards for operations, pricing, and performance, KPIs must provide tangible goals in terms of the quality of solutions.

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Risks in Life Insurance procurement

Life Insurance procurement managers also need to proactively identify and mitigate potential risks that can arise in the supply chain or contracts for Life Insurance procurement. Some examples include:

When requirements of the buyers are not absolutely clear or usage patterns are not stable or predictable, suppliers often build in \"cost buffers\" for unforeseen risks due to a lack of complete understanding on buyer's requirements. This increases the risk of overspending on Life Insurance
Contract-related risks where unfavorable credit terms may severly penalize buyers for delayed payments or entitle the supplier to demand pre-payments or shorten the payment terms are not very common in the category but they do exist in certain situations where buyers' liquidity or financial health is in question
Suppliers may face a situation where they are unable to honor a contract in its entirety due to shortage of resources, finances or capabilities. While contractual terms safeguard buyers from the non-performance, their operations could still face massive disruptions due to suppliers' non-performance

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Who should read this report

The report is intended to serve as a one-stop reference guide for Life Insurance procurement strategy and offers a perfect blend of category basics with deep-dive category data and insights. Therefore, it is ideal for category beginners looking for “Life Insurance: Procurement Report 101” as well as for category experts actively tracking the global Life Insurance procurement market.

You may have just initiated your research to design a winning Life Insurance procurement strategy, or you may be a category expert looking for strategic insights and updated data.Either ways, the report has your requirements covered.

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Key questions on Life Insurance procurement answered by this report

Procurement decisions can prove to be costly in the absence of careful deliberation and evaluation of every available option. In fact, more than 90% of the decision makers we work with acknowledge that timely availability of up-to-date category intelligence can help them make better purchasing decisions. More than 80% of them believe that in-house category intelligence needs to be updated periodically to achieve full benefits. If you have read so far, we are quite sure you agree!!

The Life Insurance procurement report helps take more informed decisions by placing all the critical information and advice at the fingertips of a decision maker. It also specifically answers some of the key questions that we have been routinely asked during our industry outreach initiatives:

What is the spend potential in the Life Insurance market?
What is the correct price to pay for Life Insurance? What are the key trends and factors that influence current and future pricing?
Which selection criteria are the most important for Life Insurance Suppliers Market?
Who are the top Life Insurance suppliers? What are their cost structures?
Which negotiation levers can reduce Life Insurance procurement cost ?
What are supplier margins in Life Insurance market?
What are the best practices for Life Insurance procurement and what are the potential risks?

SpendEdge Insights has helped procurement professionals and sourcing teams manage multiple spend areas and achieve more than $2 billion in savings. Activate your free account today!

Life Insurance Category Insights: What is inside

The Life Insurance market report offers a complete picture of the supply market and analyzes the category from the perspective of both buyers and suppliers. Analysis of the category trends, procurement best practices, negotiation levers and overall category management strategy advisory are interspersed with in-depth data and commentary on spend outlook, pricing ecosystem and supplier landscape drilled down to a region-level coverage.

Data

A key highlight of this report is the in-depth outlook created on Life Insurance procurement spend and pricing trends. The report further delves deep into the aspects of cost structure, total cost of ownership and supplier margins for Life Insurance. A dedicated section to supplier profiles and evaluation helps decision makers cast a wider procurement net and identify gaps in existing relationships.

Insights

Along with specific category and supplier intelligence, the publication also includes curated insights on Life Insurance market trends, price influencers and inherent risks. These insights help the decision makers prepare for market shaping trends in advance and create alternative strategies for changes in the market conditions.

Advisory

Additionally, the report also advises on the best practices and strategies to manage the Life Insurance category efficiently. Negotiation levers and opportunities are explained in detail along with quantification of their potential. Benchmark KPIs for supplier and buyer performance management are also aggregated to better organize the category objectives. Other themes of advisory include ideal procurement organization structure, enablers to achieve KPIs or category objectives and ideal SLAs to have with suppliers.

Category Ecosystem

Buyer and supplier ecosystem
Competitiveness index
Buyer and supplier power
Threat of new entrants and substitutes

Global and Regional Sourcing Insights

Category spend
Spend growth
Dynamics
Opportunities

Pricing and Cost Analysis

Pricing outlook and data
Drivers of pricing
Cost structure and inputs cost
Total cost of ownership
Pricing models and margins

Cost Saving Opportunities & Negotiation Strategies

Buyer and supplier side levers
Quantified cost saving opportunities
Negotiation strategies and quantified outcome

Procurement Best Practices, Strategy and Enablers

Procurement excellence
Sustainability and innovation
KPIs and category enablers
Risk management and outsourcing

Vendor Analysis

RFx essentials and selection criteria
SLAs
Supplier evaluation metrics
Detailed supplier profiles

Our research is complex, but our reports are easy to digest. Quantitative analysis and exhaustive commentary is placed in an easy to read format that gives you an in-depth knowledge on the category without spending hours to figure out “what does it mean for my company?”

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Category Research Framework

SpendEdge presents a detailed picture of Life Insurance procurement solutions by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key category influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.