After lagging behind other sectors of the economy in the matter of outsourcing, the lucrative insurance sector is now emerging as the area witnessing the fastest growth in offshore service sector with a growth rate of about 33 per cent.

While global insurance outsourcing is growing at a compounded growth rate of eight per cent and expected to touch 24 billion dollars within a year, insurance companies are seeking onshore sourcing relationships at a faster clip too. More than 91 per cent of the firms seek online offshoring help while the rest seek suppliers from abroad. This mix is now shifting offshore at a break-neck pace, according to Business Wire.

A Black Book report drawn up by Brown-Wilson Group on the insurance industry says that more than 75 per cent of global insurers use at least one IT outsourcer and one BPO vendor, where nine out of ten prefer local partners.

Offshore data security, the complexities of managing risks, cultural barriers, compliance requirements and reliability are still viewed as offshoring drawbacks by 95% of insurance users. 96.6% of onshore clients state they would consider offshore vendors if these issues manifested improvements.

System modernization, process transformation and innovation dominate sourcing agendas as the key drivers for vendor selections - more than the cost based benefits of recent years, as risks from service interruption, customer data, information security and privacy exposures far outweigh any benefits from cost reduction to insurers.

IBM Global has made a clean sweep in all Insurance Industry outsourcing domains of Information Technology Outsourcing, Business Process Outsourcing, Call Center Outsourcing and Knowledge Process Outsourcing.

About one out of five IBM Global employees are now located in India including over 20,000 in its Indian BPO division, IBM Daksh serving both core insurance systems and front office processes.