The Case for Outsourcing Insurance Processing to Ireland

Author

Lawrence K. Connor, Fontbonne College

Year of Award

1993

Degree

Master of Business Administration (MBA)

College

College of Business & Professional Studies

Degree Program

Business Administration

Department

Business Administration

Keywords

life insurance, health insurance, General American, data entry, tax, offshore

Abstract

Life and health insurance companies face a difficult decade because of image problems, growing government regulation of health care, and fierce competition. Global demographic trends suggest that successful United States’ companies will have to compete for employees as aggressively as they do for customers. In light of these developments some insurance companies and other labor-intensive, data processing organizations have established offshore facilities in Ireland. There, the English-speaking work force is well-educated and abundant, turnover is low, and a stable, business-friendly government offers a host of attractive investment incentives.

The first section of the paper explores the competitive environment driving the health insurance industry’s increasing need to cut administrative costs. Two technological initiatives are introduced, electronic media claims and front-end data entry.

The second section discusses offshore data processing in depth, with specific focus on industry experience in Ireland. The author sets out a model proposal based on an actual, mid-sized life and health insurance organization-General American. It is against this model that later information is tested for implications and strategic compatibility.

The third section of the paper presents a comparative analysis of the political, social, technological and economic environment in Ireland. Attention is given to measurable indicators favoring foreign investment in that country, e.g., return on investment, salary scales, labor availability, educational levels, and government incentives.

Next, the author analyzes four possible scenarios that General American could use to establish a front-end data entry operation in Ireland. The implications, advantages, and disadvantages of each alternative are covered.

The thesis closes with a discussion of the suitability and fit of the proposed Irish venture to General American’s present strategic environment. The author concludes that although Ireland appears to be an ideal location for offshore investment, the proposed operation does not fit the company’s current strategic needs.

Document Type

Restricted Thesis

Recommended Citation

Connor, Lawrence K., "The Case for Outsourcing Insurance Processing to Ireland" (1993). All Theses, Dissertations, and Capstone Projects. 297.
https://griffinshare.fontbonne.edu/all-etds/297