Boston, MA, USA
August 31, 2004Insurance
BPO Market Survey
Report Published by Celent
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: "Insurance BPO Market Survey: 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:
- Systems-related activities (e.g., hosting of
policy administration systems, complete management of a carrier's
IT) are common types of services provided as part of BPO deals.
- Many insurance BPO deals are limited in scope.
- TPAs are "stealth" providers that
dominate emerging competitors in key BPO areas such as claims
management and adjudication
.
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.
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