Despite insurance executives' renewed attention to reducing costs, and their increased acceptance of IT outsourcing, they still appear to be wary about expanding their business process outsourcing (BPO) plans beyond non-core activities such as human resources and benefits administration.A recent study of 286 insurance BPO deals conducted by Boston-based Celent Communications Inc. reveals there is "significant BPO activity" for core insurance services. However, many BPO deals currently are limited in scope.

Celent estimates that total core BPO spending will total more than $2.5 billion this year, and policy administration is the largest BPO category of deals involving North American insurers.

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