For Financial Services Professionals

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	June 30, 2005 BPO Services For Insurance by Marc Cecere with Christine Ferrusi Ross, Samuel Bright

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Executive Summary

Business process outsourcing (BPO) will be growing within the insurance industry, driven as much by increasing comfort with vendors as it is by the need to reduce costs. However, to date, insurance companies have been reluctant participants in BPO for both cultural and structural reasons. Overcoming this resistance is the pressure for profitability, vendor investments to develop insurance credentials, and the maturation of both carriers and service offerings. Because of these factors, the biggest growth will be seen in large carriers that will cherry pick BPO services around niche areas like agent activation and fraud detection. Smaller companies will outsource both niche areas and core business processes that are non-differentiators.

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