If you suspend for just one moment the belief financial concerns are what matter most in the business world, it seems those looking for grounds to outsource part of their operation offshore do have other reasons. They are, in fact, the same reasons other companies use to reject such a strategy–quality, flexibility, and the opportunity to grow–according to a recent study prepared by Deloitte Consulting.

Now we'll return to reality. The financial factors actually far eclipse any other reason for turning to offshore facilities, according to Peter Lowes, partner and global leader of outsourcing advisory services for Deloitte.

In the insurance industry, the average savings insurers get across all the operations they are moving offshore is 36 percent, states Lowes. The range of typical savings is in the area of 30 to 50 percent, he indicates, adding the average expected cost increase for outsourcing services heading into next fiscal year is estimated at 5.5 percent. This increase actually is the lowest of all three financial sectors–insurance, banking, and securities. "The reason for this is insurance is skewed more heavily toward IT outsourcing, which is a much bigger marketplace, and therefore it's less susceptible to wage inflation than some of the other areas," he explains. "If you are saving somewhere in the range of 30 to 50 percent and your cost base for the foreign operations is inflating only by 5.5 percent and you think about what the local inflation rate is going to be–somewhere probably in the three to five percent rate–the comparative cost advantage is going to be sustainable for a long time on that basis."