The outsourcing option is not a new concept for insurers. Indeed, our cover story in September 1999 noted that "stagnant premium growth, industry consolidation, rapid technological change and financial service market convergence are among the key drivers forcing insurers to rethink outsourcing."Fast-forward to 2004. Although the primary market drivers are somewhat different today, the industry still is wrestling with increased competition, new regulatory requirements, the inability to differentiate products, aging IT infrastructures, and the need to reduce expenses-business issues that are directly associated with implementing new technology.
IT executives are under the gun to do more with fewer resources: 75% of CIOs and CTOs surveyed last summer by Boston-based Celent Communications Inc. said shrinking budgets, cost containment pressures and increased demand on IT to deliver more projects were their top priorities.
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