Outsourcing is an important part of the insurer’s CIO toolkit, and its use is widespread. Spending on external services including outsourcing continues to consume an average of 20 percent of insurers’ IT budgets, and external staff represents 20-40 percent of IT headcount on average.
Over the past decade, there have been several shifts in outsourcing business drivers, from pure infrastructure cost reduction and legacy application support during transition to accelerating development projects and increasing agility and scalability through blended staffing models.Executive SummaryMidsize P/C firms are following in the footsteps of larger insurance companies toward the outsourcing market. Here, researchers from Novarica discuss the rise in blended or variable contracts and offer guidance for carriers large and small about contract provisions that need special attention.