outsourcing - is it cost effective???

Implications: Insurers looking for cost cutting programs are interested in outsourcing operations and customer service functions. However, the success rate has been marginal. Outsourcing faces many challenges and will continue to do so until the Indian culture adapts its business models to ones compatible with our insurance practices.

Analysis: Although there are potentially some functional areas that could be outsourced successfully, the majority face challenges and are regularily plagued with issues of culture, credibility, responsiveness, and training. I have found that the cost is far greater over a long term than anyone anticipates.  Outsourcing is supposed to be a seemless transition for a customer or broker from the carrier to the vendor. This is rarely the case. Functional areas such as IT Services are very successfully outsourced. Other areas such claims, customer service, call center are better left the the carrier.