Henri Wajsblat, Anaplan’s Director of Financial Services for Product Marketing, interviewed Anaplan partner and BetterVu co-founder and partner Mitch Max about the growing importance of labor planning in the insurance industry and BetterVu’s contribution to cost-optimization programs. BetterVu has created an Anaplan app, Labor Planning for Insurance Operations, that determines the right level of human capacity required under various scenarios and assumptions, and compares that level to planned available capacity, to enable managers to efficiently and accurately optimize their staffing needs.What business problems did you see on the market that inspired you to create the Labor Planning for Insurance Operations app? We set out to address three related problems. First, when we work with service organizations that are trying to plan and manage their costs, the conversation quickly focuses on managing the cost of labor—usually the largest component of the cost structure. With a tool like Anaplan, determining the financial budget for staff is easily done, but that leaves the more important question of how many people are actually needed. This is particularly acute as business changes—either in the mix of products and customers, or in their own processes and systems—and this directly impacts the number of people required. Planning for the staff impact of such changes is the main driver of this use of this application.Second, large organizations are now looking to internal peer group metrics to set and measure performance targets, and this data can also be an input to labor planning. And third, companies need to ensure that they have sufficient staff to both meet service-level commitments to customers (and often to regulators) and support employee satisfaction. Balancing all these factors while achieving cost and profitability targets is critical to managing organizational performance.What makes the app’s capabilities particularly interesting for the Insurance industry?Insurance companies are highly staff-based, with labor often representing 60 to 70 percent of expenses (excluding claims and distribution costs). As a result, insurance companies are continuously focused on process improvement and optimization as they work with thinner margins, increasing customer demands, and changes in the market. Our app is built using a process/activity framework and tied to business and operational drivers, so it fits well into the needs of insurers. While we see the concepts here readily apply to all service organizations, we focused this initial implementation on Insurance operations, especially the back-office functions of underwriting, customer service, and claims activities. In the context of today’s low interest rates, constant regulatory changes, and intense competition fueled by online service providers, many insurers have announced large cost-optimization programs to maintain their margins. Would BetterVu’s app support these programs?Yes! Cost optimization has many components, and at BetterVu, we support this through a number of approaches, including our more comprehensive Activity-Based Costing (ABC) app. When faced with costing challenges, there are different methods that can be deployed—for example, better travel and expenses controls, tighter management of sales channel costs, and zero-based budgeting approaches for discretionary expenses. All of these methods can be addressed through Anaplan. But the largest variable expense component is labor, and our clients quickly realize that measuring and managing work activities and the staff resources consumed by them provides the greatest impact. So our Labor Planning for Insurance Operations app leverages the process/activity framework from our more comprehensive ABC app to focus first on this critical cost element. Companies can then choose to upgrade to the ABC app when they are ready to get a more complete handle on all cost elements. For more information on BetterVu Labor Planning for Insurance app, and to learn how Anaplan can support cost-optimization programs in insurance, watch the app video and read BetterVu’s fact sheet.