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In 2012 and 2013, BFSI buyers continued to remain under pressure to increase revenue, enhance customer experience, reduce costs, replace legacy systems, and meet regulatory requirements. To address these challenges, most banks focused on transforming themselves and increasing investments in technologies such as social media, mobility, big data & analytics, and cloud computing. This enabled them to enhance customer experience while simultaneously reducing their operational costs, better managing risk, and improving shareholder returns.

As financial institutions gear up for these changes, they are looking to identify strategic partners who can help them develop solutions that drive efficiency and sustain the pace of technological advancement in this rapidly-evolving industry. In addition, with the continued trend towards consolidation, financial institutions are signing larger and more strategic AO contracts with a fewer number of service providers, a phenomenon that is expected to meaningfully alter the AO services landscape in the BFSI segment.

The Everest Group recently investigated the current trends and the future outlook for large, multi-year application outsourcing relationships for the global insurance sector. Their analysts focused on:

    • Trends in AO in the BFSI segment

    • Market trends and activities for large AO relationships in insurance

    • Emerging priorities of buyers and key investment themes in insurance AO

    • Outlook for 2014

The research also captures key movements in volume/value of insurance AO transactions, evolving trends, market dynamics, and emerging priorities of buyers in the last 12 months.

Scope of the analysis:

    • Industry: Insurance (life, annuities, and pensions; property and casualty insurance); excludes banking, capital  

      markets, and healthcare payers
    • Services: Large (TCV > US$25 million), multi-year (>three years), and annuity-based application outsourcing
    • Geography: Global
    • Sourcing model: Third-party AO transactions; excludes shared services or Global In-house Centers (GICs)

Key findings in this report:

• The BFSI IT market overview:
    + The US$90 to 100 billion global BFSI ITO industry continued to grapple with a challenging business

      environment. While the number of BFSI outsourcing transactions remained almost flat, TCV declined 25% as

      compared to last year.
    + The insurance ITO market grew at a healthy rate of ~18% in 2012. Use of digital technologies by insurance

      buyers to enhance customer experience, manage risk optimally, and improve efficiencies to drive greater 

      productivity, led to the growth of IT services in this vertical
    
• Insurance AO overview:
    + The number of large, active insurance AO contracts more than doubled in 2012 as compared to last year
    + The P&C insurance market rebounded in 2012, following a year of near-record losses from natural disasters, poor

       investment income, and a sluggish global economy
    + Small insurance firms, primarily in United States and India, opened up to outsourcing and signed more AO

      contracts compared to last year
    + Outsourcing activity in North America increased across all AO subfunctions. European buyers reduced their

       discretionary spending and focused on ERP projects to manage their entire insurance value chain
    
• Preparing for changes to the regulatory environment, expanding in emerging markets for growth, improving customer experience, and implementing effective legacy modernization programs to improve agility and profitability are the key priorities outlined by insurance firms
• Social media, mobility, analytics, and cloud computing emerged as key technological themes for insurance firms for the next 12-18 months

To preview or purchase the full report, login or register at everestgrp.com/

To learn how DDC can custom-design a solution for you that will drive efficiency and sustain the pace of technological advancement in this rapidly-evolving industry, email us directly at This email address is being protected from spambots. You need JavaScript enabled to view it.,">info@ddcusa.com, fill out this contact form or connect with a specific individual listed here.

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