“Insurance Brokers Find Outsourcing Tedious Work to India Paying Off”
by Chris Rauber
published in Silicon Valley/San Jose Business Journal, August 4, 2006
(also published in San Francisco Business Times, August 4, 2006, under the title “Firm Sends Brokers’ Paperwork to India”)

Photo: Spencer Brown/San
Francisco Business Times

Patra President Dan Easterlin
says the company's outsourcing
service is successful because
it treats the work as high value.

A startup called Patra Corp. is linking Bay Area and Southern California insurance brokers with highly trained and motivated workers in India to tackle tedious insurance-related tasks that many American staffers tend to shirk.

A number of California insurance brokers use the service, including Walnut Creek-based Heffernan Insurance Brokers, which has more than $50 million in annual billings, San Diego's G.S. Levine Insurance Services and Pasadena's Chapman & Associates brokerage, among others.

Work is outsourced to 25 workers employed by Encore India in Vizag, also known as Vishakhapatnam, a city of four million about 200 miles north of Madras in the state of Andra Pradesh. [note from Patra: in 2007, Patra Corp stopped using contractors in India and created a wholly-owned subsidiary in Vizag (Patra India), which currently has over 100 employees. The information in the following sentences of this paragraph still holds true for Patra India employees.] Their work is managed and constantly monitored by Patra Corp., using onsite managers from the United States, as well as specialized Internet tools such as real-time voice-over IP and cameras for video conferencing and monitoring work flow.  Many of the Indian workers hold bachelor's or master's degrees in business or engineering and are anxious to learn about American insurance practices, say Patra's founders, CEO John Simpson and President Dan Easterlin.

Among the takers is Robin Newman, Heffernan's chief operating officer, who says Patra's Indian workers have been processing certificates for the brokerage for about a year.  That involves the tedious checking of details on certificates that prove a company holds the type of commercial coverage it requires for various business needs, such as leasing office space, holding an event or doing subcontracting work.  The work "takes somebody with intelligence, but most people don't like doing it," says Ms. Newman.  "It's repetitive and not very interesting."

About 15 Heffernan workers here in the Bay Area had been doing the work, "all day long," but hated it.  That hasn't been a problem with Patra, she says, and the use of the Indian firm has been invisible as far as clients are concerned.  The number of errors is way down, as are processing costs.

"It's working so well for us that we're looking into having them do other things for us, like policy check-in," another time-consuming task that sometimes "doesn't get done as quickly as it should," both due to time constraints and because people hate doing it.

In contrast, Patra's approach works because it treats the work as high value, using incentive-based pay, and has most work done during standard daylight hours, using educated workers with a desire to learn a new industry.

"Here you're lucky if you have junior college grads to do the work," says Mr. Easterlin. "There, we have MBAs."

Patra was founded with funding from individual investors in the financial services and insurance industries in the spring of 2005, and started operations last August, according to Mr. Easterlin.  He and Mr. Simpson launched the firm -- which has offices in San Francisco and San Carlos but operates largely as a "virtual" company -- with less than $1 million in capital.   They expect to be cash-flow positive within six months.

"We're a bootstrap company, and we've done things very untraditionally," says Mr. Simpson, adding that includes finding a partner beyond the glare of the bright tech lights of Hyderabad and Bangalore.  "It was critical to find a place where we weren't already priced out of the market."