Transamerica Cuts Transaction Costs while Shifting Product Focus

Shifting Product Focus

Transamerica Capital Management is the annuity unit of Transamerica Life Insurance Company. As one of the nation’s top-10 annuity providers, Transamerica has a core mission to help create a better financial future for its clients.

Known for its culture of innovation, Transamerica was undergoing a shift in its business model to enhance its leading position in the retirement income marketplace. The company was de-emphasizing fixed annuities, which had been a large part of its business, to sharpen its focus on variable annuities. As it underwent this strategic move, Transamerica had to ensure its service levels remained high and operational costs were kept low.

In an environment of constant regulatory and market changes, Transamerica’s transactional volumes and staffing needs fluctuate. The company needed a flexible staffing model to adjust resources up or down based on demand.

CSC had supported Transamerica with technology and business process services (BPS) for more than a decade. After discussing the company’s operational challenges with CSC, Transamerica chose CSC’s Functional Business Process Outsourcing (BPO) solution, which provides resources on demand to support key transactions.

“We really wanted to put ourselves in a position in which we could leverage additional resources and have a lot more flexibility in our business model,” said Christine Vorhies, senior director of operations, Transamerica Capital Management.

Ensuring a Smooth Transition

CSC’s global operations centers now provide transaction processing services and support, with services provided by centers in the United States (Jacksonville, Illinois; and Nashville, Tennessee) and India (Indore and Noida).

“We like Functional BPO on the business side because we’re already in the same model with our technology group,” Vorhies said. “The CSC IT staff-augmentation team started as a small offshore team, and Transamerica progressively added services as we experienced success.”

The company considered several options to manage the fixed business on its books. However, some options would have involved a major IT conversion, which Vorhies said her operation wanted to avoid because of the potential disruption to the division’s IT staff.

The transition was made in three phases, each time increasing the complexity of business transactions handled by CSC personnel. The success of that process was important to the company’s shift from fixed annuity management to variable offerings.

“We made the transition gradually, which helped make it a smooth implementation, and we’re able to maintain at least the same service levels we could have done on our own — if not in many cases, offer better service,” Vorhies said. “We’ve had some strong results as we’ve engaged in this Functional BPO model with CSC.”

Improving Business Continuity and Project Execution

Having the additional sites in India improved Transamerica’s business continuity coverage and ability to meet its service-level standards on any given day. At one point, when the company’s primary U.S. location delayed opening due to severe weather, CSC’s team in India helped process business until the U.S. location was operational.

CSC’s global resources, along with advancing innovation within its Technology Services division, helped the company increase project execution capacity by 10 percent to 15 percent, while costs remained constant.

By getting CSC to focus on routine processing tasks, Transamerica’s staff was able to focus on value-added activities and professional growth. For example, the expansion of CSC’s annuity-focused business analysis, testing and development resources enabled Transamerica to complete a significant number of concurrent projects.

Saving $800,000 a Year While Gaining Flexibility

During various business and market cycles, Transamerica expected significant spikes in volume during promotions of products to the sales team. To ensure that service levels remain the same or even improve, Transamerica has deployed temporary resources from CSC to support all of the service work during the sales promotion.

As a result, transaction processing costs have already been reduced by $800,000 a year. “And because of that,” Vorhies said, “we’ve been able to reinvest and strengthen our service in some other areas, particularly customer-facing positions.”

“We needed a way to support that kind of strategy with high service levels, and using the outsourced business process services helps us do that while at the same time allowing us to easily downsize the additional staffing when volumes dictate,” Vorhies said.

Vorhies added that she appreciates having a close relationship with CSC. “We work very closely together in evaluating our business needs and executing what’s best for Transamerica. It truly feels like CSC has a vested interest in our success,” said Vorhies. “We work hand-in-hand with the management team in India, Nashville and Jacksonville, and they’ve become very much an integral part of our business.”