Quality and Service Will Suffer With Outsourcing

Implications: Outsourcing won't work well until the Indian outsourcing firms develop the core competencies of key insurance operations.  

Analysis:  I agree that some insurance operations appear that they could be outsourced; however, I don't think that any outsourcing firms are going to perform most functions without "missing a beat".

For example, medical claims processing could potentially be outsourced but inevitably there will be quality problems that could cause service issues with customers, providers, etc.

Word can travel quickly in the broker/consultant community. If an insurer trys to outsource and has customer service issues because the outsourcing firm does not have enough experience. it would hurt the reputation of the insurance company.