Alfinanz, the South African financial services outsourcing specialist, has been named the world`s best outsourcer for financial services for 2006. The award was made in the US by OutsourcingCenter`s Outsourcing Excellence Awards, sponsored by Forbes magazine and Everest Group.
A critical part of Alfinanz`s outsourcing operations are made possible by Progress Software-based applications from Bryanston-based software developer MIP.
In winning the award, Alfinanz followed some of the world`s leading business process outsourcing (BPO) specialists, such as HP, Accenture, EDS and Perot Systems, and it edged out many of its largest global competitors. By an order of magnitude, Alfinanz was the smallest of the companies nominated for the award, and is the first South African company to earn it. This is also the first time that the level of excellence in financial services has been recognised and awarded to a company in the 11-year history of the award.
The global programme recognised Alfinanz as crucial to the partnership with local insurer Channel Life that resulted in its rise from number 42 in the South African life insurance market to number six.
"Our success is based on two components: the correct client strategy with the right supporting technology," says Marc Tison, Alfinanz CEO. "We have reduced Channel Life`s product delivery cycles from between six and eight months to just weeks."
Channel Life has reduced its expense-to-premium ration from as high as 65% to between 10% and 20% per product. The company now administers 600 000 policies, up from 100 000, and continues to grow with the achievement of being recognised as the fastest growing life company in South Africa. Customer complaints have been reduced by 30%.
As a result of the turnaround, Sanlam last year acquired a majority stake in Channel Life, which it bought from PSG Group and empowerment partner Arch Equity. Channel Life`s IT system, via Alfinanz, enabled the insurer to reduce its employees from 165 to 28, servicing 100 000 policies.
Alfinanz absorbed those employees to administer the business based on the new financial services liability administration software developed by MIP. MIP relied heavily on business input from Alfinanz and Channel Life employees in order to ensure actuarial and financial compliance with the logic of the software.
MIP operates a risk-based billing model that requires little capital outlay and is calculated on a cost-per-life basis or per member per month.
"We have won multiple awards from around the world for our software and our billing model," says Richard Firth, CEO and chairman of MIP. "This award is particularly significant because without our risk-based billing approach and ensuring we develop critical ASP partnerships as we did with Alfinanz, we would not reap the success of such awards."
Channel Life serves businesses and individuals with pension, provident and preservation funds, as well as dread disease, funeral, life and disability cover. It began operations in the late `60s, was acquired by PSG in 1997, and introduced fresh management in 2000.
Alfinanz is an application service provider (ASP) that offers its solution, including MIP`s component, over the Internet to the financial services industry. Alfinanz`s clients are in charge of their own processing and in this way Alfinanz allows its clients to become the business process outsourcer (BPO) in the relationship. This set Alfinanz apart from the pack to win the Outsourcing Excellence Award.
OutsourcingCenter, an online community that specialises in thought leadership, best practices and innovation in outsourcing, developed the annual Outsourcing Excellence Awards programme.
Other award-winning partnerships this year included the Hughes Internet business and ACS; Vanguard Car Rental and Perot Systems; Invista and Freeborders; St Vincent Health Systems and Eclipsys; Citrix and HP Global Services; Delta Airlines and Wipro; and BT and Accenture HR Services.
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