E-Outsourcing Cuts Costs And Risks

Businesses across almost every industry have rapidly adopted Internet-based technology to differentiate themselves from competitors. Internet-based applications for marketing, e-commerce, and customer support have made it easier for companies to compete and reach a huge market that knows no geographical boundaries.

The insurance industry is no exception to this trend. Certainly, the stampede to create a presence on the Internet in the last five years has given the insurance industry a taste of the technologys potential. Carriers are testing the waters today with marketing-driven Web sites and, in some cases, basic customer or agent-support services. But, the true value of the Internet is just beginning to be recognizedoutsourcing Web-based applications through application service providers (ASPs).

Carriers originally took advantage of outsourcing operations to reduce costs and lower the risks of hosting certain business processes in-house. By outsourcing non-differentiating operations, such as human resources, payroll, financial management, and other systems, carriers could focus more on their core competencies while relieving themselves of the high costs and risks associated with developing, running and supporting business systems in house.

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