LOMA Research Report Explores the Pros and Cons of Outsourcing and Offshoring

ATLANTA, GA, December 15, 2004 — The practice of both outsourcing and offshoring has been rapidly rising and will therefore have a huge impact on the business world for years to come, according to a new report available from LOMA, entitled Outsourcing and Offshoring: Challenges and Opportunities for Insurance Companies.

�With vast disparities in global wages, an opportunity is created for labor arbitrage, the transfer of work from a high-wage to a low-wage country,� said report author Jean C. Gora, manager of research at LOMA. �Firms taking advantage of this opportunity have triggered a cycle of increasing levels of offshoring and outsourcing, and the ultimate impact of this cycle is likely to be enormous, with implications for the economies of countless countries, the salary structure of many industries, the profit of numerous corporations, and the jobs of many workers.�

The focus of the report is on information technology (IT) outsourcing and offshoring to IT service companies in the Unites States and India . Sources for the report include SEC filings, Internet sites, press reports, and government research.

Topics in Outsourcing and Offshoring: Challenges and Opportunities for Insurance Companies include:

  • An explanation of outsourcing
  • An explanation of offshoring
  • A process for selecting providers
  • Reasons for why the two practices are increasing
  • Evidence of the impact of offshoring and outsourcing on jobs

The 156-page report was written for business executives in the insurance and financial services industry. Executives in IT services companies may also find it useful. The report is free for downloading by employees of LOMA member companies who are registered with the Members Only section of the LOMA Web site. A paper copy of the report is available for U.S. $125 (members) and U.S. $375 (nonmembers).