Genpact & Genworth present their case!
Insurance and financial management firm Genworth Financial has had an outsourcing relationship with Genpact for over 10 years. Here is a frank interview between the two leaders of this long-term project.
By: Genpact's COO, Tiger Tyagarjan, sits down with Genworth's SVP of Finance Shared Services, Sena Kwawu
Tiger: The relationship between Genworth and Genpact is now over 10 years old. We understand your business and we consider this as an important element in helping you grow. What are some of your key aims in the next few years and what can we do to support you? How do we make this strategic partnership more valuable to you?
Sena Kwawu: Genworth’s 2010 priorities are focused on driving smart growth, building capabilities, managing risk & capital and developing our associates. Anyone who helps us execute on these key themes will be of value to the enterprise.
Tiger: The current economy or the cycle the world has gone through has made companies such as yours distinguish between some growth that is good growth and some growth that is bad.
Sena Kwawu: That is exactly what I meant earlier when I said we want to focus on “Smart Growth.” The other component of “Smart Growth” is increased productivity by our associates. To achieve this productivity, we need to increase the efficiency and capacity of our teams. This includes creating bandwidth for associates to execute on our business priorities. The relationship with Genpact plays a role in creating said capacity because the more we move processes to companies such as Genpact, the more capacity for our associates to focus on higher end activities, The net result is beneficial for both of parties.
Tiger: Sena, what would be an example of increasing this capability that you are trying to build in your company?
Sena Kwawu: The work we do with Genpact in our Life New Business operations is a great example. Working with your teams, we moved some of the activities that didn’t necessarily have to be done on US time. By moving these processes to India, a Genworth associate walks into work in the morning guaranteed to have the data in the system needed to make an underwriting decision for an application received the evening before. The result is reduced cycle time in processing and associates focused on decision making activities.
Tiger: So, when you create capacity to do more, is it “to do more of the same,” which is more volume, or is it actually “to do more complex things”?
Sena Kwawu: It is to do more complex things.
Tiger: So is underwriting becoming more complex now?
Sena Kwawu: Yes. Because we are introducing products which requires a finer segmentation of customer, the applicant and the risks. As we develop new guidelines for underwriting, we need our teams to be more adept at making calls on these risks. This requires interpretative skills and may require more time by our associates underwriting the applications. By creating more capacity for our underwriters, they have more time to evaluate and differentiate between the risks of each application and improve the risk selection process.
Tiger: And that has been our journey over the years.
Sena Kwawu: You guys have been there from the beginning. If I had to think about our 10-year journey, we are only now at the stage where we can say that you helped alleviate capacity to do more complex underwriting. First we had to put the appropriate technology in place and then you helped us manage the corresponding volumes. During the various increase in volume (sales) periods, Genpact helped us manage workflow by creating scalable capacity and the 24-hour work day for our Life New Business processes. As, I mentioned earlier, when someone came to work, they had all the things they needed to make an underwriting determination, no matter what the volume spike. This step change in speed and throughput is a competitive advantage for us in the marketplace.
Tiger: Is that Important?
Sena Kwawu: Very important. This allows our life insurance factory to manage the processing backlogs and variablize costs to volume
Tiger: So, does speed help you win in the marketplace? Do you sometimes lose because someone else is faster?
Sena Kwawu: We actually believe we do sometimes lose out on deals because someone else is faster, especially in our independent distribution channels. As you know, agents in this distribution sell products from different insurance companies and they present their customers with carrier options for each product. These agents present the most suitable product, then focus on companies that provide price and service. Service at the time of sale is fast decision-making. The faster the decision, the quicker the agent can return to customers with options to consider for a sale. If you as an insurance company like the risk, then being presented first to the customer increases your chance of being sold.
Tiger: Ok, so they say, “Let me know your decision fast.”
Sena Kwawu: Exactly. We believe we win because we give offer decisions for risks that we like.
Tiger: Are these agents typically sole agents for Genworth? Or do they represent the whole industry?
Sena Kwawu: Typically, in the market we play in, there are independent agents. So what you are trying to do is be the one that offers the fastest decision so that they can meet their customers’ needs. If they know it is a “no,” they know who else to go to. If it is a “yes,” they can present us first and hopefully make a sale.
Tiger: 2009 was a tough year. Genworth had set itself some challenging cost reduction targets ($100-150 MM) and you looked to partners like Genpact to support you. We drove both cost reductions and productivity initiatives to meet these expectations. To what extent do you feel we helped Genworth meet this tough target of cost reduction? What were your sticking points? What have we learned from the past year?
Sena Kwawu: Let me start with the last point as the first question, because it actually answers the first. It is not just simple cost reduction. If that is what you did in 2009 you would have guaranteed failure. So for us, it was a three-pronged approach with a desired end state to focus on our capabilities and decrease expenses. First, we did some basic things: we rationalized processes and functions that were replicated in headquarters and certain operating businesses. For example, in Marketing we slammed together our Corporate Marketing and Retirement & Protection teams to create one business marketing team driving a single message to the US life insurance industry. We did the same thing in multiple places where we believed duplicate organizations existed. The second thing we did was to focus our limited resources on products and geographies that have nearer term solid margins. We exited, or reduced our exposure to, lower performance products and geographies. We then took our remaining associates and worked on gaining efficiencies in core processes, both by scaling up areas we want to grow in and shrinking areas with lesser focus.
Did we take the $100-150 MM cost out? Yes we did. We ended up with a tighter, slimmer, and what I really believe is a more capable organization, focused on driving smart growth and profitability. If someone had asked me earlier on in the process, I might have said we are going to stop travelling, investing in capital expenditures and products, etc., to cut expenses. However, when I look back and see how we did it, we used the opportunity to focus on increasing our capabilities while making sure we designed a structure more reflective of the specialist positioning of our company.
Tiger: And Genpact had a key role in this?
Sena Kwawu: Genpact has always had a key role in the areas that make sense. You help us manage our cost base. McKinsey & Co. did a study in 2008 that said our Term Life Insurance platform runs 30% lower than the industry average -- I sat back and thought, “WOW”! Our 10-year relationship contributed to this industry leading result. We have the right technology, use of the 24-hr cycle for speed, and inordinate access to global talent. All this combined has created this big competitive differentiator.
Tiger: Also, there is the flexibility to come down when you need to come down.
Sena Kwawu: Exactly! Scalability; the ability to go up and down; and you guys played a role. For us, Genpact is an integral part of the conversation on running a Term Life underwriting operations.
Tiger: In some sense, it’s difficult to answer the question as to what role we played because the teams have become so integrated that it’s difficult to say, “this is Genpact” and “this is Genworth.”
Sena Kwawu: That is correct. We have a deep relationship and our two teams are focused on the same goals…driving speed, cost effectiveness, and prudent risk taking.
Tiger: As the journey has progressed, are you and the other peers pushing our teams, as an integral part of your group, to come up with ideas -- pushing them in terms of mental capacity, say? Are you pushing us to think differently? For example, I could be putting 10 ideas on the table, nine of which won’t work and get thrown out; but one does work. Is that happening enough? Should it happen more?
Sena Kwawu: We have worked together for so long and we are so integrated in so many places that, yes, I would expect more. I would expect Genpact to be more vocal about sharing best practices from other engagements that could be adopted to make our processes better. That is why I am excited about SEP SM. I expect SEP SM will allow Genpact to benchmark Genworth’s processes versus similar engagements and best practices industry-wide. You’ll be able to compare, contrast and recommend. That is where you can do a lot for the benefit of our long tenured relationship.
Tiger: Now you are taking it one level higher. You’re saying to us: “You guys see chassis design and organizational design and how people have got there and what has and what has not worked in the journey, and you see that across industries and across different companies. So these insights need to bubble up to add value to you at a strategic level.” Is that right?
Sena Kwawu: Yes. It gives me something to take to my CFO and say, “Hey, as we think about this journey on our own… here are other models that people are using that are working great, and maybe we should consider this, versus our current model.” If you ask us to consider a new model, we will be limited by our current experience versus the universe that Genpact sees and knows.
Tiger: So you have just answered the question of how we could add more value to you at a strategic level. That is a great point. On another: What are the advantages of partnerships such as ours as you take on new markets?
Sena Kwawu: Operational capabilities. You should continue to be a part of our operational foundation as we enter new markets. I am sitting here thinking about Mexico. If Mexico starts getting big and they need a service center, why can’t that be Guatemala? – meaning, your Genpact operations center there. These examples highlight that organizations such as Genpact help us globalize because of your geographical footprint. We could gain faster operational capabilities in regions because of your footprint.
Tiger: Any entry into a new market or new segment that requires the kind of capabilities that we have, if you leverage them, allow you to gain speed of entry and speed of growth without worrying too much about the back end capability.
Sena Kwawu: Yes. In the US and Europe this conversation is part of our thinking. We are working to drive that same mantra as we enter newer markets.
Tiger: As long as what we have matches the footprint that you need, as you enter into new markets, that makes the conversation easier.
Sena Kwawu: As we look at the world today, ie, your footprint versus where we are today, the match does exist. This is a conversation we just need to keep open as we move ahead.
Tiger: Have you had any change management types of issues, buy-in issues?
Sena Kwawu: Actually we have the opposite; we have been together so long that the question now is “Why Genpact?” You helped us clean up processes and helped increase our efficiencies. We expect, in most businesses, that operations just work at the lower cost levels that we have. We now understand the benefits of the relationship, however. Bby asking, “Why Genpact?”, we ensure that we are with the right engagement model. If we do not ask that question, we may get complacent in the relationship. So, it’s not a buy-in issue. If anything, it’s a matter of Genpact continuously demonstrating value from the relationship.
Tiger: Which is why it behooves us to keep upping the ante – bringing in new ideas, new values … innovations that we bring to the table to get us noticed, so that we don’t just disappear ….
Sena Kwawu: Yes. I have always believed that cost just gets you into the game. What keeps you in is capability; helping me, as a customer, with capability, capacity, Insights and growth.
Tiger: I love that statement and it’s a great note on which to end this conversation.
Sena Kwawu, Senior Vice President, Finance Shared Services, Genworth Financial, Inc.
Sena assumed his current role in January 2009 after serving as SVP, Global Sourc¬ing. He leads a globally dispersed team that manages the $600MM+ purchase base of Genworth Financial, with a focus on improving the company’s expense ratio while improving the value of services received. Sena joined the General Elec¬tric Company in 1993, auditing GE Capital’s businesses around the world. He went on to hold roles of increased responsibility in Finance, Six Sigma Quality and Risk Management until October 2003. He was promoted to SVP, Business Planning & Analysis – Protection Segment where he led finance activities for that strategic business unit during Genworth’s initial public offering. In August 2006, he assumed responsibility for the Global Sourcing organization. Prior to joining GE, he worked in commercial loans with Bank of America in Washington, D.C. Sena earned a BBA degree from George Washington University, and a MBA from the University of Michigan, Ann Arbor.
Tiger Tyagarajan is the Chief Operating Officer of Genpact.
Tiger is credited as one of the pioneers who transformed GE Capital International Services (now Genpact) into a leading Business Process Management Company with over $1 billion in revenues, which serves global enterprises in the banking & finance, insurance, manufacturing, transportation and business-services sectors. In 1999, Tiger became CEO of GECIS, significantly expanding its service offerings and operations. In October 2002, he transferred within GE to its multibillion-dollar Commercial Equipment Finance division, serving as Senior Vice President, Six Sigma and Global Operations. Tiger rejoined Genpact in 2005 as Executive Vice President based in New York City, and in 2009, was promoted to his current position of Chief Operating Officer. He leads service delivery across business verticals and geographies with a focus on managing global operations, driving best practices, cost efficiency and End-to-End solutions.
Tiger began his career with the Unilever Group in India, then joined Citibank as VP & Auto Business Director, Global Consumer Banking. He came to GE in 1994 and went on to become CEO for GE Capital's Global Consumer & Auto Financial Services operations in India.
Tiger has a degree in Mechanical Engineering from the Indian Institute of Technology, Mumbai, and an MBA, majoring in Finance and Marketing, from the Indian Institute of Management, Ahmedabad.
Tiger Tyagarajan and Sena Kwawu will be sharing their stories at the 14th annual Shared Services & Outsourcing Week, March 22-25, in Orlando, Florida. Over 800 professionals from across the world will be in attendance. To sign up for this conference, and network with hundreds of other practitioners, click here (
About Genworth Financial
Genworth Financial is an international financial services organization that offers a portfolio of primarily consumer-focused products through its various companies, including annuities, combination products, investment services, life insurance, long term care insurance, medicare supplement insurance, mortgage insurance, and payment protection insurance. Genworth Financial is headquartered in Richmond, Virginia, and employs over 6,000 people in 25 different countries.
About Genpact
Genpact is a leader in managing business processes, offering a broad portfolio of enterprise G&A and industry-specific services. Genpact combines deep process knowledge with focused IT capabilities, targeted analytics and pragmatic reengineering to deliver a comprehensive solution. Services are delivered from a global delivery network to meet a client’s business objectives, cultural and language needs, and cost reduction goals.