Insurance BPO Market Survey
| Boston, MA, USA August 31, 2004|
There are several ongoing insurance BPO deals. But survey results suggest that carriers are not in a hurry to broaden their efforts, despite their success with ITO. Celent predicts BPO spending for core insurance services will grow at a modest rate through 2006, reaching nearly US$3 billion by then.
Insurance carriers know that outsourcing can help them achieve strategic objectives, but lingering questions about business process outsourcing have prevented dramatic increases in its use.
"Almost everyone agrees that BPO is an approach with great potential to improve business flexibility and lower costs,"
says senior analyst Craig Weber, author of Celent's latest report: " : Will The Watched Pot Ever Boil?" "But there are still unanswered questions preventing the explosion of BPO that seemed like a done deal several years ago."
The report summarizes current insurance BPO activity, analyzing deals by several factors, including carrier type, carrier size, and business processes covered. It is based on deal-level data supplied by 14 BPO providers active in North America, representing a total of 194 insurance BPO deals. Participating providers are Accenture, ACS, CGI, Computer Sciences Corporation, Connextions, EDS, First Notice Systems, HCL Technologies, IBM, Keane, Unisys, Wipro, WNS, and Xerox.
Weber says many carriers remain unconvinced that outside parties can develop sufficient insurance vertical expertise. "And even if vendors can prove they have the expertise, there are other considerations, like the additional costs of managing outside resources," Weber says. Negative fallout from a skeptical public is also affecting carrier decisions to move forward with BPO, he adds.
Other key findings of the report:
The report identifies Computer Sciences Corporation as a clear leader in terms of providing BPO to North American carriers, as it is among the top providers in terms of both estimated BPO staff and estimated BPO revenue. CSC is also named as the category leader in seven out of eight BPO "meta-processes" used to classify BPO deals. The report also identifies EDS, ACS, IBM, and First Notice as BPO providers with a solid current market presence.
A Table of contents is available online.
of Celent Communications' Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left. Non-members should contact email@example.com for more information.
Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].
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|Boston, MA, USA August 31, 2004|
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