Dalbar To Rate Suppliers Of Insurance Companies
Dalbar Inc., a financial services research company in Boston, says it will soon introduce a supplier-rating program to give insurance companies and investment firms a way to evaluate important vendors.
The firm says it will offer its Dalbar Balanced Scorecard service in the first quarter of next year to provide independent ratings of key suppliers to the investment and insurance industries in such areas as administration services, communications and printing, training, software, call centers and sales support.
Dalbar is known for its quarterly rankings of Web sites of insurance companies and financial services. Its latest venture grew out of an interest among those same firms in receiving guidance in assessing outsourced services, a Dalbar spokeswoman says.
“Weve been asked in the past for opinions on suppliers because of the nature of our relationships with financial firms,” says the spokeswoman, Kathleen Whalen. “That spearheaded our thoughts of taking it to the level of creating ratings of suppliers to these institutions.”
Dalbar contacted hundreds of investment and insurance companies, and half said they would be interested in using an independent supplier rating system, she adds.
Its system would measure suppliers capabilities and competence, based on surveys of supplier executives and actual tests by Dalbar researchers of each suppliers services, Whalen says.
The researchers would also appraise each suppliers innovations and ways that it adds value, such as by reducing errors, she explains.
Dalbar will also take into account each vendors financial strength and performance track record, says Whalen. “Our objective is to provide a holistic view of what suppliers have to offer,” she adds.
“The purpose of the scorecard is to reduce the risk and time involved in selecting and validating critical suppliers,” says Louis S. Harvey, president of Dalbar.
The service will be free of charge to investment and insurance companies.
The system will be paid for by suppliers themselves, which might pay as much as $11,000 for a full rating, says Whalen.
Vendors would be able to comment on their own evaluation, she says. Dalbar will also offer them confidential evaluations so they can have a chance to improve their ranking, she adds.
Whalen claims the proposal has received strong acceptance from suppliers.
“Some see it as a great opportunity to differentiate themselves in a time when financial firms are looking to cut costs,” she says.
Dalbar is currently recruiting vendors to participate in the program, she adds.
“Were in the mining stage,” Whalen says. “We want to get critical mass.”
Reproduced from National Underwriter Life & Health/Financial Services Edition, December 2, 2002. Copyright 2002 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.