Insurers’ Value from IT Outsourcing Tied to Optimizing Level of Use: Novarica

Insurers who outsource some but not most of IT have highest satisfaction levels with the strategy

Boston, MA (May 2, 2019) – IT outsourcing can be an effective way to staff transformational projects and meet capacity needs, but it’s neither a silver bullet nor a simple process. In a new report, IT Outsourcing in Insurance: Current Trends and Key Issues, research and advisory firm Novarica presents data from a recent study of 71 insurers on their utilization, plans, challenges, and goals.

“Outsourcing can help insurers staff transformational programs, provide access to new skill sets, and provide more flexible resourcing in the face of varying business demands,” said Paul Vancheri, VP of Research and Consulting at Novarica and co-author of the new report. “However, the process of outsourcing does not come without challenges. Insurer CIOs must understand that effective outsourcing requires considerable time and commitment from the insurer and outsourcing partner.”

IT Outsourcing in Insurance

Among the key findings of the report are:

  • Insurers outsource 25%-30% of their IT teams on average. Specific levels vary from 0% to as much as 90% as strategic business needs dictate.
  • Cost is not the key driver unless outsourcing is a long-term strategy. Most insurers outsource to meet skills or capacity needs for critical transformation projects or rapid business growth.
  • Project management is the key. Insurers are least satisfied with their partners’ (and their own) project management abilities, which can decrease overall value of the relationship.

A preview of the brief is available online.


IT outsourcing has long been an important tool for insurer IT leaders who need to meet increasing business demands. Strong relationship management is a crucial success factor for any outsourcing engagement. Insurers are advised to take care when managing their relationships with outsourcing partners. This report presents data from a recent study of 71 insurers on their utilization, plans, challenges, and goals.

Topics covered include:

  • Outsourcing utilization and drivers. Benchmarking information for insurers.
  • Future outsourcing plans and reasons for change, including whether original drivers continue to obtain.
  • Managing the outsourcing relationship. Key satisfaction and self-assessment metrics.

Click here for the table of contents or to access the report.

About Novarica

Novarica helps more than 100 insurers make better decisions about technology projects and strategy through retained advisory services, published research, and strategy consulting. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and more than 300 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project checkpoints, and IT strategy. For more information, visit

Source: Novarica

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