Novarica Report Says 85% Of Insurers Outsource Some Element of Information Technology

February 7, 2012 (NEW YORK) – A new report by research and advisory firm Novarica, Outsourcing in US Insurance IT: Current State and Future Plans ( report_outsourcing_trends_2012) based on a survey of over 100 US insurer CIOs finds that 85% are currently outsourcing at least some elements of IT, and between 25 and 35% are planning to increase their level of outsourcing in 2012.

“Insurer CIOs across the industry are embracing outsourcing and blended staffing strategies in order to enhance productivity without increasing fixed overhead,” said Matthew Josefowicz, partner and managing director of Novarica. “With the imperative to ‘do a lot more with a little more,’ blended sourcing can help insurers stretch their IT resources.”

Among the key findings of the report:

  • 85% of insurers are using at least some outsourcing services today in either variable staffing/staff augmentation, legacy application maintenance, or data center or infrastructure management.
  • Large insurers outsource more than 25% of their IT work, while small and mid-size companies typically outsource only 15% of their IT work.
  • More than a quarter of large insurers are planning to increase their reliance on outsourcing in variable staffing, legacy application maintenance, and data center/infrastructure.
  • Midsize and small insurers are half as likely to be planning to increase their usage rates of variable staffing and legacy application maintenance, but are nearly as likely to be planning to increase data center or infrastructure management outsourcing.
  • Midsize and small insurers are twice as likely to see a high value in data center and infrastructure management outsourcing than larger insurers are. About a third of the respondents intend to increase infrastructure outsourcing, regardless of company size.

More information about the report is available online at report_outsourcing_trends_2012

About Novarica

Novarica provides information, insights, and perspective on markets, operations, and technology to financial services and insurance executives. The company delivers its service through published research, retained advisory services, and project-based consulting. Novarica�s research includes market and trend analyses, best practices research, case studies, and independent analyses of insurance software vendors. Novarica draws its knowledge from the personal experience of its principals, the ongoing information gathering initiatives of dedicated research staff, and regular communication with insurer executives through informal networks and through the Novarica Insurance Technology Research Council, a moderated knowledge-sharing community of more than 300 senior IT executives representing more than 260 North American insurers. More information at