Global carriers can create IT advantages for themselves national insurers will have a hard time beating. But outsourcing can make the world of insurance get a little bit smaller.

Taking best practices and moving them from country to country is just one way identified by the Boston Consulting Group (BCG) for insurers to claim a global advantage over their competition. In its report Creating IT Advantage in the Insurance Industry, BCGs vice president, director, and co-author of the report, Boyd Pederson, claims the ability to aggregate technology bases that are scalable, such as the infrastructure and the network, allows carriers to take that investment and apply it more broadly across multiple geographies. This permits carriers to spread those items that are typically more fixed-cost initiatives across a broader range of countries.

In some ways [insurance] is very different globally because of regulatory measures, product differences, the ways in which it is sold, and the distribution channels, notes Pederson. I would say the product can be very different from geography to geography depending on the type of [insurance]. The underlying drivers of a life insurance contract probably are not that dissimilar from China to North America, but the underlying information about the risks would be very different.