Noida: In a country facing an actuary crunch, Patni Computer Systems Ltd is relying on many kinds of people to do the work of one.
A few years ago, when the software company wanted to get into the outsourcing business, it turned to someone with a proven track record in BPO: Sanjay Kapur, who had helped HCL Technologies Ltd set up its unit.
Patni told him that it wanted to do complicated finance and insurance work, the kind of stuff clients don’t even think of outsourcing. Actuaries assess financial risk, calculate insurance premiums and value pension funds, all of which require specialized training in math, statistics, accounting and insurance probabilities.
DIVISION OF WORK (Graphic)
“If I went to a client and said I want to do your actuarial evaluations,” Kapur recalls himself worrying, “he would have thrown me out of his office.”
So, instead of waiting for clients, Kapur, who now heads Patni’s BPO arm, thought of different routes.
If Patni was going to handle something like actuarial work—meaning evaluating whether or not a pension fund has enough assets to pay off promised benefits, and calculating prices and payouts for insurance policies—it would have to break it down into a process.
Its strategy is significant because it represents how BPO firms are moving into the more lucrative knowledge process outsourcing, or KPO—even amid rising salaries and a talent crunch. It also reflects a new role for clients, often based in the US and Europe, as mentors to industries that are new and skill-intensive for Indians.
Different levels: (R to L) Patni employees Siddhartha Kalita, who has finished 11 out of 14 papers administered by the Actuarial Society of India, and Kirti Kalra, who has a degree in math from Miranda House. (Sanjay Sharma / Mint)
When Patni looked into the practice last year, the prospective numbers looked good. Similar kinds of so-called KPO services generated $3 billion (around Rs12,000 crore) in revenue and were on track to quadruple by the end of the decade. Actuarial departments were running up big bills for Patni’s US clients since actuaries were both expensive and difficult to find in that country. Insurance analysis also seemed like a field well suited to India, with its mathematics-heavy education system.
The only hitch was that India shared the US’ problem when it came to actuaries. First, they were hard to find. The Indian insurance industry had historically been a small one, and there were only about 225 certified actuaries in the country. Then, they were also expensive.
“I would have to pay the earth and the moon for them,” Kapur says. More specifically, he would have spent anywhere from Rs18 lakh to Rs35 lakh per year to hire each one. To become certified, students have to pass 14 papers administered by the Actuarial Society of India, and the course often takes 10 years to complete.