IT Outsourcing: Carriers Trim Outsourcing Budgets

Although the industry in 2002 experienced a number of high-profile IT outsourcing arrangements, a new study suggests that insurers overall are decreasing their reliance on hosted IT applications. The study, by Stamford, Conn.-based Gartner Inc., shows that the percentage of both life/health and property/casualty carriers using IT outsourcing declined in 2002 from 2001 levels.The reasons for the decline are tightening IT budgets caused by the hardening insurance market and the current global economic slump, says Kimberly Harris, a Gartner research director and author of the report (see "Last Word," page 38).