To cash in on the growth potential, several niche providers with relevant expertise are encouraging insurance companies to outsource more value-added services, says Mr Pradeep Udhas, Global Head of Sourcing Advisory of KPMG, in an email interaction with Business Line. “Insurance BPO is set to get a boost with insurance services maturing and more high-end processes such as analytics, actuarial and underwriting services moving to India.”

So much so, we may see, by 2010, a large number of Indian vendors evolving into ‘mature, end-to-end service providers, competing with multinational outsourcing companies’.

KPMG considers it likely that buyers in the UK and Europe increase their share of the insurance offshoring market, even as the share of business from the US buyers falls by the end of the decade. The US insurance industry, as described in the KPMG study, has over 1,500 property and casualty insurance companies and 1,300 health insurance companies.

Genpact, WNS and EXL Services, as well as BPO offshoots of IBM, TCS, Infosys (Progeon) and Wipro, are expected to emerge as competitive global players in this space.

The study identifies several key drivers of insurance offshoring, apart from cost saving, such as: focus on core processes, speed to market, technology risk, better quality through specialised services, insurance regulation and statutory documentation in the US, deregulation of insurance markets, health maintenance organisations moving their processes offshore, availability of credible service providers, minimising risk through multiple delivery locations and resolving inquiries without handing off the caller to other administrators.

However, on the flip side, cultural differences, perception of loss of control and local data protection and regulation can inhibit insurance companies from offshoring, fears the study.