Comdata recently acquired the insurance BPO branch of Kauri Financial Services, in a deal that will help to modernize customer management in Italy’s insurance sector. Under the deal, Kauri’s insurance business has been transferred to Insurecom, a newco set up and fully controlled by Comdata.
Alessandro Varotto, Comdata’s sales & business development director for Italy and CEO of Insurecom, explains the reasons and opportunities behind the deal, and how it will benefit insurers, their end-customers, and Comdata.
First, Alessandro, can you tell us what the deal involves?
It was finalized and announced in June this year. We took over all the insurance BPO services of Kauri Financial Services, a leading BPO company. As a result, we have gained over 400 employees and four operating offices around Italy. Average annual revenues from the business are around 14 million euros.
The acquisition is important for us because Kauri’s customer base consists of 10 or so major companies in the Italian insurance market, including big names like UnipolSai, Cattolica and Zurich. Some of those 10 companies will be new additions to our own customer base; others are already Comdata clients but the deal will extend and reinforce our relationship with them.
Overall, the deal will position Insurecom, and Comdata, as a leading player in BPO services for the insurance industry in Italy.
Why do this deal now?
The financial services sector is growing and changing fast in Italy. We’re not as far advanced as other markets in Europe in terms of digital adoption, and we still have a culture of banks and insurers dealing with customers in person. 95% of business is still managed directly, using agents.
But that is changing. We’re starting to see a lot of reorganization in the insurance and banking sectors in Italy as providers seek to shift to more efficient remote and online models. Naturally, we want to invest in this trend – to support and advance the ‘remotization’ of strategy, migrating insurers’ activities from the physical to digital to online to home.
Announcing the deal, Comdata said it’s a major step in its business development plan, which aims to increase revenues by 50% within the next two years. How will the deal contribute to that?
As I said, the deal has expanded our client base, so that will grow the volume of our activities in this sector. But also, and very importantly, we’ve added skills and competencies in the insurance market. We have 400+ new employees whose specialist skills complement our own skills.
For example, our new employees have very strong competencies in areas such as front-end and back-office operations in life assurance and bancassurance; in claims management, including 24-hour emergency operations centers; and in health insurance, from contract underwriting to claims management.
We were not previously working in some of those areas, so that’s an important development for us and opens up new opportunities. For example, now in health insurance, by combining our own capabilities and those of Kauri’s team, we could offer clients end-to-end support, from acquisition of customers to claims management.
How will Kauri / Insurecom’s insurance clients and their customers benefit from this deal?
We will bring them the benefits of Comdata’s own capabilities. That includes improving their processes and procedures, which will increase customer satisfaction; bringing them new technologies, using our knowledge and solutions to open up the digital side of the business; and giving new perspectives on how to offer better value to their customers.
Their customers will also benefit from increased value. Because we can now manage insurance market clients end to end, we’ll be able to create synergies, and to offer one-contact solutions and one-contact resolution.
Also, thanks to Comdata’s capabilities in sales and second-level competencies, we will be able to upsell and cross-sell. For example, if someone speaks to an agent about car insurance, they could also sell them home insurance or life assurance. As well as creating value for our insurer clients, it will benefit their end-customers, who will be able to acquire all the policies they need, cover all their insurance risks, with one company, speaking with one person.
We have been very transparent about this deal all the way through, and reaction from clients has been positive.
And what are the benefits for the Kauri employees?
From their point of view, they are moving from a local to an international company with more than 10,000 people in Italy and 50,000 worldwide, opening up excellent career opportunities and options to improve their skills and competencies.
Where do you go from here, how will you build on the deal?
This deal is the starting point to push our strategy of development in the insurance market, putting together all this experience and creating an integrated offer for companies in this market.
We see a big opportunity for Comdata to develop on the sales side, using digital channels and digital technology. The complementarity and synergies from their and our expertise in sales, back-office processes, the management of complex second-level activity – all of that will allow us to offer a complete end-to-end strategy for insurance customer management.
We also see scope to push our capabilities to integrate this area with other areas like banking. Bank-insurance is one of our strategic pillars; It’s a big trend in Italy, which has some catching-up to do with other markets in the rest of Europe. In Italy, we are at the start of this process, so we can facilitate this trend, closing the loop by using Comdata’s capabilities. Comdata is already strong in Italy in terms of banking activity, with around 1000 people working on it, and the deal with Kauri brings our insurance practice up to around the same size. Since we’re now working with the main brands in both banking and insurance, we’re in an ideal place to facilitate Bank-insurance integration.
Like I said, this deal is a major step for us and for the insurance sector too. It will solidify our expertise in financial services, a fast-growing sector in our market, and bring benefits for clients, their customers, Comdata and our staff. We’re in exciting times!
To find out more about how we’re helping insurance and banking clients in Italy – or the rest of the world – get in touch. We’d love to tell you more.