Over just the past 18 months, COVID-19 and the pace of digital transformation have produced massive, high-speed changes to the insurance industry. The changes have spanned technology, process automation, insurtechs, cloud and on-prem infrastructure hybrids, cyber security and work-from-home delivery models. Yet the vast majority of insurance outsourcing contracts contain very little that reflect this new world. Insurance outsourcing contracts today look like they could be straight out of 2010.
Over the next three years, $6 billion of insurance outsourcing contracts are up for renewal. At the same time, a steep increase in new outsourcing contracts is taking place as insurers look to third parties to assist in their digital transformations. Insurance companies have a huge opportunity to update their outsourcing contracts to reflect the post-COVID-19 world – and reduce risk, save money and improve performance.
This ISG white paper Why Are Insurance Outsourcing Contracts So Bad? addresses vital questions about the changing shape of outsourcing contracts:
- What major shifts in outsourcing strategy should my contract reflect?
- What new post-COVID-19 contract clauses should be added or updated to my contract?
- What are the major tenets of a sustainable outsourcing contract?
- Why should insurers leverage the benchmarking clause in their outsourcing contract?