Etude sur la pertinence et le business case des offres d'asset management en BPO pour le secteur luxembourgeois des assurances-vie

Abstract

The Life Insurance Sector in Luxembourg is more complex than elsewhere in Europe. With different product offerings amongst countries, Luxembourg has grown to be a leading choice in terms of estate planning. Despite this, the regulations have become increasingly constraining pushing companies to find solutions to reduce their costs. As in every case of cost rationalisation, the option of outsourcing solutions has emerged. For KPMG identifying the new tendencies of the industry and understanding how significant the impact of these will be on the market are two important aspects. This will enable them to gain insight on future developments and to anticipate the needs of their clients. This study provides KPMG with an overview of both the supply and demand context. It also raises awareness on key points such as the valuation of unquoted assets, lack of automation, gap between supply and demand and other relevant financial aspects. Through the project, it has become clear that BPO offers are available, but do not create enough added value for them to become a clear choice for Life Insurance companies. These businesses will actually continue to face the same problems and service providers will not be able to help them solve this. There is therefore a need for the offer to mature and evolve. Based on this study, the next step for KPMG is clear. There is no possibility of developing a service offering, but there is instead a strong opportunity from an advisory standpoint. In fact, KPMG has a key role as an external actor to provide the right advice to the right entity. They must create and reflect upon new ways for companies to perform in the sector, in order to reduce manual processing and activities that slow down the asset management processes.