Insurance IT Outsourcing Market Falls to Lowest Point Since 2011, but Demand for Digital Will Turn the Tide–Everest Group
The number of new application outsourcing (AO) deals in the insurance sector have fallen precipitously for two straight years, with year-on-year losses of 14 percent and 30 percent in 2014 and 2015 respectively. The total contract value (TCV) of large deals fell in 2015 to
But the demand for digital will turn the tide.
"Over 90 percent of insurers agree that adoption of digital technologies is a priority as they seek to grow, optimize and defend their business," said
These findings and more are explored in
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Other key findings:
- In 2015, insurers increased overall offshoring for IT delivery to support their cost-containment efforts.
Asia still continues to be the most cost-effective option for application outsourcing services delivery. -
North America continues to be the most dominant sourcing geography in terms of number of deals. - Around 76 large AO insurance deals with TCV of
US$9.29 billion are coming up for renewal (2016 to 2020). - In 2015, 35 percent of new deals included digital services in their scope of work. Mobility and analytics are the most in-demand technologies, as clients look to adopt digital technologies to differentiate themselves and enhance distribution, product, and core insurance processes.
- Market uncertainty prompted insurers to adopt input-based pricing models for large AO deals in order to get flexibility in their IT spending.
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Read the full story at http://www.prweb.com/releases/2016/12/prweb13941485.htm
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