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Old 07-17-2006, 10:06 AM
kuchcha kuchcha is offline
 
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Default Outsourcing

When is outsourcing likely......
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Old 07-17-2006, 10:17 AM
Beach Bum Beach Bum is offline
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Read "The World is Flat" by Thomas Friedman.
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Old 07-17-2006, 10:19 AM
DW Simpson DW Simpson is offline
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Old 07-17-2006, 10:32 AM
Westley Westley is offline
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When benefits to outsourcing exceed the costs of outsourcing. Or, when perceived benefits exceed perceived costs.
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Old 07-17-2006, 01:19 PM
ShebaPoe ShebaPoe is offline
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I wouldn't read Friedman's garbage.

In P&C, the industry is slow to embrace outsourcing (or offshoring, really). A lot of this is due to perceived compliance issues - the difficulty of a vendor getting a contract through sourcing, legal and compliance is amazing.

P&C companies are often very slow to give up control of anything, as well. Managers of business units are often career people who cannot imagine a perceived weakening of their fiefdom so to speak.

One of the things I do at work (not an actuary) is try to introduce investors (usually hedge funds, some other institutional investors) to insurance investments. The partners at the funds all want to do the "outsource everything" model where they put up the capital, buy old / inactive licenses, and issue write risks.

Everything from actuarial to underwriting to claims and recovery would be outsourced / done by assembled vendors. A major broker was looking to do this but held off after katrina; they had other problems to attend to.

This has been the only way outsourcing has made significant headway in P&C (that I am aware of) - because the investors care about returns and don;t care what is done in India or wherever.

Insurance execs and managers are dinosaurs in this regard. You've got some time.
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