Top 18 Insurance IT Outsourcers Named... But What Kind of Market Awaits?
Insurance Experts' Forum, November 22, 2011
The Everest Group, an outsourcing research consultancy, just identified what it considers to be the the top 18 IT outsourcing services for the insurance sector. The top vendors, divided into three categories, include several known names and some fast-rising upstarts:
The insurance application outsourcing market—represented by the 18 service providers assessed in the report—scaled up to over $5.3 billion in revenues and 66,000 full-time employees spread across 20 delivery countries, Everett calculates. While global majors dominate the market in terms of revenue, offshore majors are seeing improved revenues and transaction activity built on strategies that include positioning more FTEs in strategic nearshore and offshore delivery locations. Everett observes that the leading offshore service providers have witnessed the fastest growth in revenues as well as new accounts over the last three years.
The outsourcing market itself, however, is in a state of transition. There still are many multi-million dollar contracts being signed, and entire operations turned over to these providers. But with the growing prevalence of cloud computing, there are more and more deals taking place for smaller components as well. Cloud computing—be it acquiring publicly available services from the like of Salesforce or Amazon, or asking a vendor to host an application—is outsourcing, but at a more granular level. It is shifting the market away from multi-million-dollar winner-take-all deals to many more smaller engagements that may be no more than $100 a month—micro-engagements, if you will. The outsourcers themselves know this all too well, and many do offer cloud infrastructure as part of their packages.
But with so many options blooming, outsourcing as we've known it is changing. For one, industry application vendors are starting to open up their offerings as cloud services. Even insurance companies themselves may be the provider of such services. For example, I spoke with a CIO last year that spun his company's private cloud operation for insurance client-side applications into a separate company that serves others within the industry. The bottom line is that outsourcing is becoming a whole different ball game, and that's nothing but good news for enterprise customers.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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