Building a Shared Services Centre for Australian Insurers

A shared services centre can give an insurer a more consistent way to manage finance, accounting, claims administration, procurement, customer support, data, and technology operations. By consolidating repeatable work, the organisation may reduce duplication, improve reporting, and create clearer ownership of processes across business units.

The model needs careful design, particularly in Australia’s regulated insurance market. A centre located in Sydney, Melbourne, Brisbane, or another regional hub must support teams across different states, work with local tax and employment requirements, and maintain service standards that policyholders expect from their insurer. The right operating model balances efficiency with resilience, control, and a practical understanding of customer needs.

Define the operating model before choosing a location

The first decision is not whether the centre should be based in Sydney, Melbourne, or offshore. It is which activities are suitable for centralisation and which need to remain close to underwriting, claims, distribution, or customers. Transaction-heavy work such as accounts payable, reconciliations, payroll support, master data, and standard reporting is often easier to consolidate. Complex claims decisions, relationship management, and work requiring deep product judgement may need a distributed model.

A useful design separates ownership from execution. Business units should retain accountability for outcomes, customer commitments, and technical decisions, while the shared services team can provide standardised processing and specialist support. This distinction prevents the centre from becoming a dumping ground for every task that lacks a clear owner.

Service catalogues and service-level agreements should describe what the centre provides, to whom, and within what timeframe. Measures might include invoice cycle time, reconciliation accuracy, claims administration turnaround, first-contact resolution, data quality, and customer-impacting errors. These measures should reflect business value rather than activity volume alone.

The location strategy also needs to account for workforce availability and operating hours. An Australian centre may draw finance and technology talent from Melbourne, insurance specialists from Sydney, or lower-cost operations capability from Brisbane, Adelaide, or regional areas. Hybrid work can widen access to talent, but managers still need a consistent approach to training, supervision, security, and collaboration across time zones.

Build controls around regulation and accountability

Insurance organisations cannot transfer accountability simply by transferring work. APRA-regulated entities must continue to understand how important services are delivered, where risks sit, and how suppliers and internal service providers are managed. APRA’s CPS 230 operational risk management standard, which commenced in July 2025, makes service-provider oversight, business continuity, and operational resilience central considerations for many insurers.

The shared services design should document critical operations and define tolerances for disruption. For example, an insurer may need to establish how long it can operate without claims payments, policy administration, premium processing, or access to financial records. Recovery plans should be tested with realistic scenarios, including a cyber incident, a major weather event, a technology outage, and the loss of a key processing team.

Privacy and information handling require equal attention. The Privacy Act 1988, the Australian Privacy Principles, and the Notifiable Data Breaches scheme affect how personal information is collected, accessed, stored, transferred, and reported. A centre processing health information, financial details, or claims documents needs role-based access, audit trails, secure file transfer, retention rules, and a clear incident escalation process.

Finance controls should be designed alongside operational controls. Segregation of duties, approval limits, journal governance, reconciliations, vendor validation, and records management need to work across multiple systems and locations. If the centre supports statutory reporting, APRA returns, tax reporting, or board information, control owners must be identified before migration begins.

Standardise processes without erasing local needs

A shared service centre creates value when common processes are genuinely common. Before migration, the insurer should map how each business unit performs a task, identify unnecessary variation, and agree on a target process. Moving inconsistent processes into one team merely centralises complexity and can make defects harder to trace.

Process standardisation should still accommodate Australian requirements. Premium and claims workflows may involve GST, state-based duties, product-specific rules, and different documentation requirements. Customer communications may need to reflect Australian consumer law, accessibility expectations, and established preferences such as phone support, email confirmation, and direct debit arrangements.

The technology environment should support a single source of reliable information. Core administration platforms, finance systems, workflow tools, document management, identity controls, and reporting layers need clear integration rules. Data definitions are particularly important: policy status, claim stage, customer identity, expense category, and service completion should mean the same thing across the enterprise.

Automation can remove repetitive work, but it should be introduced after the process and data are stable. Robotic process automation may assist with reconciliations or data entry, while workflow platforms can improve approvals and case visibility. Machine learning may help identify patterns and personalise interactions; insurers considering this area can review this machine learning guide alongside their governance, model risk, and privacy requirements.

Plan the transition around people and customers

A migration programme should be staged according to risk, readiness, and interdependencies. Low-risk finance or procurement activities may provide an early test of the operating model. Claims, customer administration, and regulatory reporting usually require more extensive parallel running, reconciliations, user acceptance testing, and contingency capacity.

People need a clear explanation of what is changing and why. Employees moving into the centre may require training in process management, controls, service recovery, and stakeholder communication. Staff remaining in business units need to understand how to request support, escalate issues, approve transactions, and provide feedback. Capability planning should address the risk of losing experienced employees whose operational knowledge is essential during the transition.

Customer impact must be measured directly. A new workflow may appear efficient in an internal dashboard while creating longer wait times for a policyholder or additional effort for a broker. Testing should include realistic customer journeys, vulnerable customers, complaints, interpreter needs, digital exclusion, and high-volume periods following storms or other catastrophes.

Australian insurers also need to consider geographic and community realities. A Melbourne-based team may need reliable coverage for customers in Western Australia, while a Brisbane operation may face service disruption during severe weather. Hybrid arrangements and regional hiring can build resilience, but only when supported by secure connectivity, documented procedures, and cross-trained staff.

Govern performance as an enterprise capability

The centre should have a governance structure that connects executives, finance, operations, technology, risk, compliance, and customer leaders. A steering committee can resolve priorities, approve changes, and monitor benefits, while service owners manage day-to-day performance. Governance should focus on decisions and outcomes rather than creating layers of meetings.

Performance reporting should combine efficiency, quality, risk, and experience. Useful measures include cost per transaction, backlog age, rework, control exceptions, system availability, employee capability, complaints, and customer effort. Trend information is more valuable than a single monthly result because it shows whether improvements are durable or whether the centre is accumulating hidden work.

Continuous improvement should be part of the centre’s mandate. Teams can use root-cause analysis, process mining, control testing, and feedback from frontline staff to remove recurring failure points. A catalogue of improvement opportunities helps leaders distinguish quick fixes from larger platform or policy changes.

The centre can also become a source of specialist expertise rather than a low-cost processing unit. Finance transformation, data governance, fraud analytics, regulatory reporting, and operational resilience capabilities can be developed centrally and shared across product lines. Industry events such as the IASA Conference provide opportunities to compare approaches with insurance finance, accounting, technology, and operations professionals.

Practical priorities for the first year

• Establish an executive sponsor, accountable service owners, and a cross-functional design team.
• Select processes using clear criteria for repeatability, risk, customer impact, and data readiness.
• Document critical services, recovery tolerances, control responsibilities, and supplier dependencies.
• Create a service catalogue with measurable standards, escalation paths, and transparent performance reporting.
• Pilot the model with a manageable process before migrating high-risk claims or customer operations.
• Fund training, change management, cyber controls, testing, and transition capacity as part of the business case.

The strongest business cases make benefits visible without treating cost reduction as the only objective. They show how consolidation will improve control quality, reporting consistency, employee capability, resilience, and customer service. They also include realistic costs for technology integration, recruitment, retention, duplicated operations during transition, and ongoing assurance.

A well-designed shared services centre should feel like a dependable extension of the insurer’s operating model. It should make routine work easier to control, give business units access to stronger expertise, and provide leaders with trustworthy information for decisions. It should also be capable of adapting as regulation, customer behaviour, climate risk, and insurance technology continue to change.

Australian insurance executives and finance leaders can use the next planning cycle to test their assumptions, map critical services, and identify suitable pilot processes. Connecting with peers, technology providers, and subject-matter specialists at the IASA event can help turn an initial concept into a controlled, measurable implementation programme.