Beating the back-office blues
Outsourcing helps agencies manage workflows and free employees
to learn and grow
By Elisabeth Boone, CPCU
Even in agencies with the most sophisticated automation systems, routine duties—endorsement or certificate processing, loss runs, credit checks, and MVR
requests—take time away from sales efforts, relationship building, and the more complex
tasks that are best handled by skilled CSRs.
Many agency owners are discovering that these and other processes can be handled
efficiently and economically by outsourcing firms that train college-educated
employees in overseas locations to perform a host of back-office functions. We
talked to executives of three agencies which have appeared on the cover of Rough Notes that made the leap to outsourcing. They say that the results have exceeded their
expectations and erased their initial doubts about data security,
accountability, and clear communication.
“We learned a great deal about outsourcing at a Sitkins event in 2007,” says Doran Lamond, vice president of commercial lines at Litchfield Insurance
Group, Torrington, Connecticut. “They introduced us to the firm that we’re currently using—ReSource Pro.”
Established in 2003 by New York City-based wholesaler Distinguished Programs
Group, ReSource Pro opened a processing facility in Qingdao, China, to support
back-office operations for managing general agencies. (See “The Night Shift” in the April 2006 issue of Rough Notes.) The firm subsequently expanded its services to carriers and retail agencies
and in 2008 opened a second office in Jinan, China.
ReSource Pro offers a diverse menu of services tailored to the specific needs of
each client. Its offices in China are staffed by local college graduates who
receive comprehensive training in insurance operations, and a dedicated team is
assigned to each client to ensure consistency. The ReSource Pro team accesses
the client’s automation system via the Internet and, as the 2006 article suggests, operates
as the client’s “night shift” thanks to the significant time difference between the United States and
ReSource Pro’s locations in China.
Litchfield began working with a dedicated ReSource Pro team in 2008. “Our biggest concern was: How can we communicate our procedures to the team?” Lamond says. “We have a small staff and, over the years, when we’ve brought in new employees, we’ve teamed them up with an experienced account manager. Our new people learned by
observing and doing, not by studying a procedures manual. Not having a formal
manual presented a big challenge when we decided to outsource,” she remarks. “To explain a procedure to our team in China, we had to break it down into steps
in a way we hadn’t previously done.
“Thanks to outsourcing, we now have a very detailed procedures manual,” Lamond comments with a chuckle. “At the beginning of our relationship with ReSource Pro, we spent two days with a
representative from their New York office who came into our agency and
basically watched me do every single step of the renewal process, which was the
first task we were planning to transfer to China. He took thorough notes and
went back to his office and typed up detailed instructions.”
By following these instructions, the team in China is able to gather updated
payroll information and loss runs, summarize the loss runs, and enter the
information into Litchfield’s management system, Lamond explains. In essence, she says, “The team members function as the assistant to the account manager—doing the data entry and the more clerical kinds of processes—which frees up the account manager to get the higher-end documentation to make
the final coverage and pricing decisions.
“For renewal processing,” Lamond continues, “it took us a full year to get our ReSource Pro team up and running. It was a
huge task to set up the chain of procedures. The renewal process lasts five
months, so the team would be working on one account through all the stages over
a four- to five-month period.”
In the agency’s second year with ReSource Pro, “We started adding in all carrier documentation,” Lamond says. “Now our team handles the entire back end from the time a policy is issued. They
check policies, process change requests and endorsements, and handle audits.”
Lamond reiterates that getting to this point was a gradual process. “For each new task we would send to our (ReSource Pro) team, I was the
checkpoint,” she explains. “For the first couple of months, I would double-check their work and then release
it to our account manager to handle. That let me achieve a comfort level that
our team had mastered a task and could do it on their own, and that they knew
enough to ask for help or question something out of the ordinary.
“Now, as we send our team new tasks, we give them screen shots of the different
steps instead of written instructions,” Lamond explains. “They study the sequence of the procedure and type up detailed instructions, then
send them back to us so we can review them and tweak them if necessary. We send
the instructions back to the team, and they start testing the procedure.”
Today, Lamond says, Litchfield’s ReSource Pro team is functioning smoothly and providing vital back-office
support that frees the agency’s account representatives to take on more challenging responsibilities.
Also enthusiastic about its results with ReSource Pro is TCOR Insurance
Management of Beeville, Texas. Rick Dudney, managing partner at TCOR, like
Lamond at Litchfield, says his agency learned about ReSource Pro at a Sitkins
event. “We attended a ReSource Pro presentation at a Sitkins Extreme Networking meeting,
and, after researching the firm, we selected them to be our provider,” Dudney says.
At the beginning of TCOR’s relationship with ReSource Pro, he remarks, “We were trying to outsource tasks instead of workflows. Since changing our emphasis, we’ve experienced exponential growth and success with outsourcing,” Dudney declares.
“We basically have three processes here: new business, renewals, and endorsements
and changes. We started giving our team sections of a workflow. We asked, ‘Where can they start the process, and how far can they take it before they hand
it back over to us?’ We look at every workflow that way,” Dudney says.
“ReSource Pro does 90% to almost 100% of the endorsement and change request
workflow—we’re just the go-between with the client. We forward the e-mail order from the
client to ReSource Pro, and they do all the rest. They send it back to us and
it goes into our system. If we need to physically deliver the endorsement or
change to the client, we do that, but that’s the extent of our involvement,” Dudney says.
“There are other processes where the ReSource Pro team only handles 25% or 30% of
the work. But they initiate almost every process for us.”
Dudney agrees with Lamond that communication and consistency were key factors as
TCOR evaluated its outsourcing options. “I chose ReSource Pro because I wanted a dedicated team of personnel who would
work only on my functions and not on anyone else’s, and who would work for me consistently,” he says.
“Except for promotions and transfers, our team in China has remained the same
since we started working with them,” Dudney says. “There’s a high degree of continuity.”
TCOR created the position of outsourcing coordinator to serve as the agency’s interface with its ReSource Pro team in China. Dudney says he appointed a
person who had worked in every department at TCOR. “At first, she was basically a project manager who was responsible for moving
processes back and forth between us and our team in China. The way it works
now, all communication between us and China is copied to her, and she monitors
“This has proved to be a big help in improving communication between us and our
team,” Dudney comments. “We really benefit by having a dedicated employee look at every communication piece before we send it to China and
review it after it comes back to us. She can find and fix things before they
become big problems for us and our team in China.”
The bottom line? “We started working with ReSource Pro in late 2007, and they’re now involved in almost every aspect of our business,” Dudney says. “They even handle our accounting functions, so they’re virtually a complete back-office solution for our agency.”
For Roach Howard Smith & Barton (RHSB), based in Dallas with branches in Fort Worth and San Antonio, an
outsourcing firm called Patra offered an attractive solution to the agency’s back-office issues. About 70% of the agency’s revenue is generated by commercial accounts, and outsourcing provides the
staff the opportunity to meet a key objective: to establish and maintain “high touch” relationships with business clients.
“We started exploring outsourcing options about three or four years ago,” says John Losurdo, partner and chief operating officer of RHSB. “Our interest really picked up steam when some of our Assurex partners shared
their experiences with outsourcing using different firms.”
Because the majority of RHSB’s business is commercial accounts, a key objective for the agency is to
establish and maintain what Losurdo calls “high-touch” relationships with clients.
After researching a number of outsourcing firms, RHSB chose Patra Corporation
and began outsourcing workflows to a team in India in October 2009. Founded in
2005 and endorsed by the Council of Insurance Agents & Brokers, Patra’s headquarters are in Novato, California. Most processing functions are handled
at its location in Vizag, India, by employees who are fluent in English and
formally educated in business and technology. Like ReSource Pro, Patra provides
services to MGAs, carriers, and retail agencies.
“We chose Patra because of their experience and expertise and because they could
deliver cost-effective solutions for our needs,” Losurdo says.
RHSB has relationships with a number of third-party vendors that involve data
sharing, and Losurdo is experienced in verifying the credentials of such partners. “With Patra, I’m satisfied that our data is protected,” he says.
Another key concern that agents have about outsourcing is the challenge posed by differences in culture and language. Employees in China and India
may speak excellent English, but American English is chock full of idioms and
phrases from other languages that simply don’t translate for those for whom English is a second language.
“For every process we want to outsource, we write up a highly detailed workflow,” Losurdo says. “We give our team a checklist for each workflow so they can be sure they’ve completed each of the required steps. With this approach, we don’t really lose anything in translation. Patra made it clear to us that where
their office is located in India, they are considered the employer of choice.
“The majority of India’s population is relatively young, and all of Patra’s employees are college educated. Of course we sometimes have language issues,
but the detailed written workflows are a powerful tool for ensuring clear
communication with our team,” Losurdo declares.
“We’ve been fully ramped up with our Patra team since about June of this year, and
right now they’re doing primarily policy checking for two of the commercial P-C departments,” he says. “With coordination through our risk services department, they are also ordering
loss runs for our risk management accounts. This information is summarized by
the risk services department and used for both marketing and client
“Outsourcing these back-office functions plays a key role in our agency’s transition from a manual/paper delivery model to our online Virtual Risk
Manager platform, which allows us to deliver all of our products and services
to our clients electronically,” Losurdo continues. “We’re excited about our partnership with Patra and the opportunity it gives our
staff to connect more effectively with our clients.”
Not so long ago, agency principals and other business owners viewed the
outsourcing of back-office functions as a murky and possibly dangerous
enterprise. They worried about possible loss or theft of vital data, bungling
of processes, and alienation of valued clients. Today those concerns have been
largely put to rest by the emergence of competent, disciplined outsourcing
firms that understand the insurance business and can relieve agencies of their
growing burden of back-office functions.
For more information:
Web site: www.patracorp.com
Web site: www.resourcepro.com