Cambridge, Mass. - Insurance companies will gradually move away from geographic and product silos, focusing more on cross-domain business processes, according to a report from Cambridge, Mass.-based Forrester Research Inc. The report goes on to predict insurance companies will identify processes that can be implemented with common systems and configured for local needs and that this trend will increase the use of business process outsourcing (BPO) as carriers outsource nondifferentiated processes.The report, "Process-Oriented Insurance Will Drive BPO," suggests insurers implement specialized project teams with process and sourcing expertise, use frameworks like Six Sigma and deploy systems that provide the flexibility to accommodate local needs without complex development efforts.

Forrester states the use of IT outsourcing and BPO is slowly growing. The report cites a 2006 survey of North American and European businesses in which 64 IT decision-makers at insurance companies and 1,000 IT decision-makers across all industries were asked if they consider IT outsourcing or BPO to be a key part of their strategy. More than half of the insurance respondents (55%) and 66% of all industries respondents said no. Also when asked whether they expect IT outsourcing or BPO to be a bigger part of the company's strategy during the next two years, 58% of insurance respondents and 66% of all industries respondents said no.

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