From call centers to data centers, the insurance industry continues to turn to outsourcing in an effort to manage costs and secure access to resources. Information technology assets have become vital to ongoing operations and new growth, making these outsourcing relationships more than technology arrangements-they are now critical to business success. Combined with new regulatory mandates, this trend may be forcing carriers to push deeper and engage more proactively with outsourcing vendors.IT industry analyst firm Gartner Inc., Stamford, Conn., calculates that outsourcing will capture up to 33% of all IT services spending across industries by 2008-up from 26% in 2003. The analyst firm also predicts the insurance sector will be spending more than $10 billion on outsourced services by that time.

Historically, the insurance industry is no stranger to the practice of outsourcing, relates David Greenwell, vice president of the insurance practice for The Revere Group Ltd., a Chicago-based IT consulting firm. "The insurance industry was an adopter of outsourcing even before it was called 'outsourcing,'" he says. "We started using TPAs [third party administrators] for claims and benefits processing dozens of years ago."

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