Global Legal Process Outsourcing market crosses US$ 1 billion in revenues in 2012

According to a study by LPO program, the global legal process outsourcing market has reached the $1 billion mark and is continuing its growth at an annual growth rate of 32 per cent. According to Global Outsourcing Association of Lawyers blog post on www.kpoconsultants.com, the global spending on legal services is estimated to be around $250 billion. United States alone contributes about two-thirds ($167 billion) in terms of legal services. For law firms and organizations outsourcing of legal services to India can be considered to be a lucrative option but it is not feasible to outsource every type of legal service, hence the market for legal services outsourcing stands at around $111.2 billion. Out of which India can only target only 3.6% ($4 billion) and in reality only 2% ($80 million) has been outsourced till now. This highlights the fact there is a relatively big untapped market available for the Indian LPO vendors and other global LPO vendors to exploit which also helped the industry to cross the billion-dollar mark in 2012. According to a Nasscom market intelligence report, the LPO segment is expected to touch $15 billion by 2015.

The Indian LPO space is dominated by pure play LPO vendors such as Pangea3, CPA Global, Unitedlex, Integreon, Intellevate and Evalueserve. In 2010, Pangea3 became part of Thomson Reuters, the world’s leading provider of intelligent information to legal and business professionals. In the initial days of Legal Process Outsourcing (LPO) to India most of the work used to be backend processing like transcription but the high end work like IP processes, legal research, pre-litigation documentation, document analysis, preparing software licensing agreements is presently being outsourced to India along with the low end work as the Indian LPO vendors have matured and have built the capabilities in terms of skills and hired talented lawyers. One of the important process for companies is the patent filing which is also being outsourced to India  which is known as Patent Process Outsourcing (PPO and the process has more than 900 professionals who are qualified and trained to provide patent related services at a cost of $2,500 compared to $8,000-$12,000 charged by U.S. firms. Currently, the entire Indian LPO sector only employs some 50,000 people, according to Sanjay Kamlani, the co-CEO of New York-based Pangea3.

India already has more than a million practicing lawyers, and another 70,000 new graduates are added every year as they pass out from various law colleges across India and these lawyers are educated in English medium, similarities between Indian Legal System and U.K., U.S., Canada, and parts of Europe, labour cost arbitrage, time zone advantage, experience in providing various types of outsourcing services, and the clear edge that Indian LPO vendors have in terms of cost, quality and turnaround time. Along with the pure play players Indian Outsourcing giants like TCS, Infosys, Wipro all offer LPO services and they work with very prominent US clients. Despite the hype in the past years the Indian LPO industry had been growing steadily but far slower than the other types of outsourcing which are Information technology, Business process, and Knowledge process.  Most of the time the high end work cannot be outsourced and the reliance on the low end work is not highly profitable and to increase the high end work Indian LPO vendors are also setting up onshore centers in United States and United Kingdom. According to ValueNotes, market intelligence and consulting firm the large pure play LPO players are financially strong and they can survive in the industry and grow but smaller pure play LPO players will struggle due to their inability to maintain consistent operating profits, resulting in rising debt levels. Overall Indian LPO vendors majorly the pure play vendors will dominate the Global Legal Process Outsourcing Market and will see steady growth in the next few years.

Table of various services provides by Legal Process Outsourcing Vendors

Low skilled quantitative tasks consist of:	High end qualitative tasks include:
Paralegal Services & Legal Coding Corporate Secretarial Services Legal Memo Development Medical & Legal Transcription Document Management Litigation Support Data entry Immigration data analysis and working on labor relations	Intellectual Property Rights & IPR Portfolio Management Patent Search & Application drafting TM and Copyright Registration Legal Research/Opinion work Document Review and Analysis Intelligence Services Contracting and Administration

Source: http://www.kpoconsultants.com/resources/blogs/2012/08/12/12-legal-process-outsourcing-to-move-beyond-mere-billion-dollar-status.html

Global Platform as a Service (PaaS) Market 2013 & forecast 2018 market growing

PaaS provides a cloud computing platform and a solution stack that allows developers to create applications and software and test them by utilizing tools and libraries from the cloud services provider. Compared to Software as a Service (SaaS) and Infrastructure as a Service (IaaS), PaaS market is small and slowly picking up and the reason being complexity in adaption and building a standardized PaaS platform from the scratch is very difficult for organizations. According to Markets and Markets, Global Platform-as-a-Service market is estimated to grow from $1.28 billion in 2013 to $6.94 billion in 2018 at a compound annual growth rate (CAGR) of 32.54% in this period. In terms of geographies, North America continues to be the biggest market for PaaS solutions. Worldwide platform as a service (PaaS) revenue is on pace to reach $1.2 billion in 2012, up from $900 million in 2011, according to Gartner, Inc. The market will experience consistent growth with worldwide PaaS revenue totaling 1.5 billion in 2013, and growing to $2.9 billion in 2016.

Along with the large players like Amazon, Google, IBM, etc., small players also emerged in this segment that made the market more competitive and vibrant with new products and services are being offered by the cloud services providers. The need for the businesses to develop new applications, tools and technologies at a low cost have increased the demand for the developers and also for PaaS offerings as most of the developers are looking to PaaS to develop and test new apps and software. Application Development and Maintenance PaaS (ADM PaaS), Business Process Management PaaS (BPM PaaS), Application PaaS (aPaaS), Integration PaaS (iPaaS) and Other PaaS are the segments categorized based on Applications.

According to Gartner, the largest segments within the PaaS market are cloud application platform services (aPaaS), accounting for 34.4 percent of total PaaS spending in 2012; cloud application life cycle management (ALM) services (almPaaS) at 12 percent; cloud BPM platform services (bpmPaaS) at 11.6 percent; and cloud integration services (iPaaS) at 11.4 percent. Gartner predicts that the potential spending in PaaS technologies is an average of $360 million per year from 2011 through 2016.  "The fundamental appeal of PaaS is the opportunity for ISVs (independent software vendors) and IT organizations to create new software solutions with minimal capital expense and without the hassle of provisioning and configuring the underlying infrastructure," said Yefim Natis, distinguished analyst at Gartner. "Too many SMBs (small or midsize businesses), in addition, PaaS offers the chance to take advantage of some state of the art enabling technologies, they otherwise could not afford. Finally, the popularity of SaaS also drives adoption of PaaS for customization, extension and integration of the cloud-based applications."

IDC expects 2013 will see an explosion in industry PaaS (public platform as a service) offerings as the market moves up the software stack and "horizontal" PaaS becomes commoditized by platforms built on open source-based infrastructure. In industry PaaS, cloud-based shared services environments are being tailored to the needs of a specific industry, while additional industry-focused solution developers are developing and deploying a range of industry-targeted value-added solutions and services on these platforms. Examples of emerging industry PaaS include: NYSE Capital Markets Community Platform in financial services; numerous health information exchanges in healthcare; and Johnson Controls' Panoptix App Marketplace in smart energy. (Source: IDC predictions 2013: competing on 3^rd Platform) 

Insurance BPO Vendor Profile – HCL Tech BPO

With the strategic acquisition of Liberata Financial Services, regulated in UK by The Financial Services Authority (FSA), HCL has the ability to offer comprehensive end-to-end administrative services and customer services to Life & Pensions Insurers.  Key Service offerings include Agent licensing, New business/underwriting, Policy Administration, Account Administration, Commissions, Claims management and actuarial services.

HCL Practice Highlights: Top 5 Life & Pensions BPO service provider in UK, Platform based BPO service provider for Life & Pensions market, Proven capability to offer actuarial services, Dedicated Insurance Competency Center headed by Insurance experts. Gartner rates HCL’s Insurance Outsourcing Practice as “Mature” in BPO for Life and Property & Casualty Insurance

Only company to win the “Excellence in Insurance Education” award by LOMA for the 5th consecutive year. Maximum number of Advanced LOMA certified resources in practice. Key certifications are LOMA (FLMI, ACS, ARA…), AICPCU (CPCU, INS), CII (London) examinations and III-India (FIII).

HCL’s insurance practice is built on strong domain expertise with proven application and process optimization capabilities across the Quote-to-Claim cycle. HCL’s investment in product assets, intellectual property and dedicated Insurance Solution Development Centers, a strategic ecosystem of partners and strong integrated business operations capabilities help insurers address myriad of business challenges.

More than 10 clients & 8+ years experience in P&C space. FSA regulated Insurance Business Unit in UK. 1200+ people manage more than 4.6 million policies for marquee clients.

Insurance BPO Vendor Profile – Wipro BPO

Wipro’s insurance practice works with 35+ global insurers including many among the Top 500 organizations. Wipro customers include 4 of the top 6 P&C carriers in the world, 2 of the top 5 health insurance and service providers globally and 4 of the top Life, Annuity & Pension carriers in the world. Wipro is uniquely positioned to provide strategic and innovative solutions based on 3000+ person-years of experience in managing ~150Mn claims transactions annually for leading insurers.

Offerings cover the entire spectrum of the insurance value chain from Sales & Distribution, Policy Administration, Risks & compliance and claims, straddling across Life and P&C markets and delivered by over 6000+ dedicated resources. Wipro expertise in Business Advisory services, solutions and Centers of excellence reflect their commitment towards building the future of insurance. 4000+ consultants with an average experience of 10 years have delivered innovation in products, branding, marketing and pricing strategies.

Partnerships & Alliances: Camilion Solutions, eBaoTech, OneShield, Pega Systems, Prima IBCS, SAP, SSP. Associated Services (ITO + BPO Bundled Service) – Managing approximately 115MN transactions annually for their customers, Wipro is ranked amongst the top 3 in terms of volumes handled in the BPO Space.

With a client base of 140+ Health insurers and Offices spread across Atlanta - US, Monterrey - Mexico, Curitiba -Brazil, Wroclaw - Poland, Bucharest – Romania, Chengdu & Shanghai – China, Cebu City – Philippines, Yokohama - Japan, company is capable of providing multi-lingual support in English, Spanish, Portuguese, German, French, Chinese, Japanese.

Insurance BPO Vendor Profile – Infosys BPO

Infosys BPO insurance services include: Quotations, underwriting and associated compliance activities, Financial administration (e.g., premium accounting, A/R), Claims adjudication, processing and review, Policyholder servicing (amendments with and without, underwriting), Agency management, Actuarial and analytics, Documentation fulfillment.

In September 2012, Infosys BPO acquired the captive BPO unit of US-based insurance brokerage Marsh & McLennan Companies for an undisclosed sum and would add about $10-12 million ( Rs 55-66 crore) in incremental annual revenue for Infosys BPO, would involve taking over of about 87 employees. The transaction would add at least seven group life insurance clients for Infosys BPO.

McCamish Systems LLC, an Infosys BPO company, specializing in end-to-end, enterprise-wide insurance and retirement business process solutions, has increased its presence in the Voluntary Group Life Insurance business space by commencing operations in Des Moines, Iowa, USA. The unit has 87 employees, serving seven insurers and covering more than 600,000 insured lives.

Infosys acquired McCamish Systems in an all cash deal of $38 million in December 2009. McCamish Systems LLC signed a multi-year agreement with FaithLife Financial, a not-for-profit financial services organization that provides life insurance, health insurance, income protection and investment products in Canada. Phoenix Life Insurance (Hartford) has signed a multi-year agreement with McCamish Systems for selected blocks of its life insurance products, including conversion of data, policy administration and customer support. 

Insurance BPO Vendor Profile – Genpact

Genpact's life and annuity clients include several top-20 life/annuity companies, a top-three reinsurer, the retirement services and insurance divisions of major financial institutions, a top-three global broker, and efforts with LOMA and LIMRA. Genpact’s more than 14 years of global insurance experience is supported by an extensive team of certified domain experts .

Under the seven-year agreement with Ironshore, a leading provider of specialty lines insurance, Genpact will manage and standardize Ironshore's end-to-end middle- and back-office operations to increase effectiveness and productivity, allowing the insurer to focus on continued growth of their client-facing underwriting operations and further expansion into new markets.

Key Service offerings include Application to Issue (A2I) Solution,  Product Development, Sales and Marketing, Policy Administration ,Underwriting and Risk Management, Corporate Functions,agent services, actuarial analysis, underwriting support, claims processing, etc. Key insurance clients include AON, BUPA, Genworth Financial, Travelers, All State, Max New York Life Insurance,  etc. MajescoMastek and Genpact has strategic partnership focused on the insurance industry.

Genpact’s global insurance practice is driven by a team of professionals who hold over 2,800 insurance certifications, including LOMA, IIA, AAPA, FINRA Series 6, FINRA Series 7, AICPCU, and actuarial exams, of which LOMA certifications are 1,200.

Genpact’s Insurance practice has 4500+ employees providing end to end services and also has  400+ specialist staff in areas including underwriting and analytics. 

Insurance BPO Vendor Profile – WNS

WNS insurance outsourcing service offerings extend across the insurance value chain of Property and Casualty, Life, Pensions, and Annuity. Services related to Product Development, Sales & Distribution, Policy Administration, Claims Administration, Analytics, Finance & Accounting and Customer Care.

With a dedicated team of over 7,500 professionals for the insurance industry, WNS manages over 40 million claims per year helping insurers streamline their claims operations. WNS recently positioned industry 'leader' for Insurance BPO in Everest Group's  Insurance BPO PEAK Matrix.

In January 2012, Australian insurance major Suncorp gave majority portion of the order worth $220 million to WNS for end-to-end insurance outsourcing for a period of five to seven years.

WNS won a $228-million contract from UK-based Aviva in 2008 for all in-scope services related to Aviva's life & general insurance businesses in the UK and Canada. Based on the anticipated service requirements of these businesses, WNS estimates Master Services Agreement could generate $1 billion in revenues over the life of the contract. WNS also benefits from a recently signed AGS contract for approximately 580 employees with Aviva's Irish subsidiary, Hibernian.

In June 2012, WNS has acquired South Africa-based Fusion Outsourcing Services in an all cash deal of over £10 million or $15.5 million. Fusion currently employs about 1,500 people and the centre currently offers high-end voice services with plans to start financial, accounting and insurance services.

Insurance BPO Vendor Profile – EXL Service

EXL’s insurance experience is proven by 60 leading global insurance carrier clients and the tenure of more than 4,000 industry professionals and is dominant player in the US Insurance BPO Market. EXL provides high quality services and better controls support to clients allowing them to be more efficient and to better understand their customers, their markets and their risks. Clients leverage EXL’s outsourcing, analytics, advisory and risk management capabilities.

Collaborate with clients to understand their priorities & design solutions to address insurers needs and support them to manage claims, enhance subrogation services, improve first notice of loss, build compliance preparedness, improve underwriting margins, optimize loss ratios, increase customer penetration or accelerate customer reach, &  help P&C, life, annuity and health insurers become competitive.

In October 2012, EXL acquired Landacorp, a provider of software in support of clinical data exchange in the healthcare industry  and acquisition brings 15 payer clients and 50 provider clients and Landacorp has  50 million members under management on its platforms

In October 2011, EXL acquired Trumbull Services, a specialized provider of Insurance BPO services in the Property & Casualty (P&C) segment in the US, which has a ready-made technology platform to offer in  U.S. P&C Insurance BPO space and the insurance subrogation BPO business in particular. In May 2010, it acquired PDMA, the maker of LifePRO, a policy administration system in the Life Insurance BPO market deployed with 40+ insurers around the world.  

Insurance BPO Vendor Profile – TCS BPO

Tata Consultancy Services (TCS) has been designated as a leader in insurance BPO in the Everest Group report – PEAK Matrix. TCS is dominant in UK market through its subsidiary Diligenta.

Diligenta, UK FSA regulated subsidiary was established in 2005 to specialize in the provision of business process outsourcing (BPO) services for the UK life & pensions industry. In 2006, Diligenta secured its first £486 million deal with the Phoenix Group (formerly known as the Pearl Group). Since then, Diligenta has secured a number of new clients in the Life and Pensions sector and today administers circa 5 million policies.

TCS has over three decades of experience, partnering with over 90 regional and global insurers to achieve improved operational efficiencies, reduced costs and customer / partner satisfaction and  services span all insurance segments - life, healthcare, property and casualty (general insurance) as well as annuities, pensions and retirement, and span the complete life cycle.

Recently concluded a multi-year, multi-million dollar transformation project at Phoenix Group, the UK’s largest specialist consolidator of closed life funds that involved replacing and decommissioning 11 major life and pension administration systems, hundreds of peripheral systems and migrating more than four million policies and customer records, across multiple brands and product lines into TCS BaNCS Insurance.

TCS won its second-biggest outsourcing contract worth $2.2 billion from UK based pension firm Friends Life, based on a model wherein the company will be paid for each insurance transaction and will add another 3.2 million policies. 

Global Insurance BPO Market 2012

The global insurance BPO market has been valued at US$2 billion by the end of 2012. and segment grew by 17% annually. Third-party Business Process Services (BPS) in the insurance industry currently a US$6-8 billion market growing at ~17% annually.

Post 2008 Financial crisis there had been a stable growth in the number of contracts signed in both the Life & Pensions (L&P) and Property & Casualty (P&C) lines. In fact the contracts almost doubled in number when compared to 2008-2009 when the financial crisis had a severe impact on the insurance companies. BPS in insurance rebounded with 53 new, publicly-announced contracts signed in 2010-2011.

United States and United Kingdom are the primary markets for Indian Insurance BPO vendors, but the market is also going global and activity is picking up in other regions of the world too. Asia Pacific showed significantly increased activity over the last one to two years .

Insurers expect BPO as a key tool to cut costs, improve operations, and manage regulations. Service providers are differentiating their offerings through better technology, strong delivery capabilities, and the ability to serve niche segments.

The 2012 insurance BPO PEAK Matrix has three:

1. Leaders (EXL Service, TCS, and WNS)

2. Major Contenders (Genpact, HCL, Infosys, and Wipro)

3. Emerging Players (Capgemini, Cognizant, and Serco) 

4. Leaders control 60% of the overall insurance BPO market in revenue terms with healthy growth rate.

5. EXL Service is dominant player in the U.S. BPO insurance market.

6. TCS dominant in the UK BPO insurance market

Industry-specific BPO accounts for over 60% of BPO contracts in insurance, spanning product development and business acquisition, new business, policy servicing and reporting, and claims processing.

Leaders have a wide scale of operations and have a significant advantage over Major Contenders and Emerging Players. Capabilities of the major players differ not only in terms of the variance of the service offerings but also in terms of the Geographies they are servicing successfully.

Leaders and Major Contenders have built delivery capabilities from various different locations and this global delivery presence is a big competitive advantage when compared to Emerging Players.

The five themes identified Everest group are Platform-based BPO offerings, increasing focus on the U.S. closed books BPO market, inclusion of complex processes in insurance BPO contracts, higher degree of on shoring, and regulatory and risk management BPO. 

Source: Everest Group.

 1. https://research.everestgrp.com/Product/11922  

2. https://research.everestgrp.com/Product/11946