IT Outsourcing in Insurance – Service Provider Landscape with PEAK Matrix™ Assessment 2013

31 Dec 2013
by Jimit Arora



In 2012-2013, BFSI buyers continued to remain under pressure to increase revenue, enhance customer experience, reduce costs, replace legacy systems, and meet regulatory requirements. To address these challenges, most banks focused on transforming themselves and increasing investments in technologies (such as social media, mobility, big data & analytics, and cloud computing) in order to enhance customer experience while simultaneously reducing their operational costs, better managing risk, and improving shareholder returns.

As financial institutions gear up for these changes, they are looking to identify strategic partners that can help them develop solutions which drive efficiency and sustain the pace of technological advancement in this rapidly-evolving industry. Additionally, with the continued trend towards consolidation, financial institutions are signing larger and more strategic AO contracts with a fewer number of service providers, a phenomenon that is expected to meaningfully alter the AO services landscape in the BFSI segment.

In this research, we analyze the capabilities of 20 leading AO service providers, specific to the global insurance sector. These providers were mapped on Everest Group’s Performance | Experience | Ability | Knowledge (PEAK) Matrix, which is a composite index of a range of distinct metrics related to each provider’s capability and market success. In this report, we focus on:

  • The landscape of service providers for insurance AO
  • Assessment of the service providers on a number of capability-related dimensions
  • Characteristics of Leaders, Major Contenders, and Emerging Players on Everest Group insurance – AO PEAK Matrix
  • “Star Performers” of 2012, providers with the strongest forward movement over time – in terms of both market success and capability advancements
  • Implications for insurance buyers and service providers

In addition to this, the research also provides an overview of the impact of recently proposed immigration reform on India-centric service providers and its clients.

Scope of the analysis:

  • Industry: Insurance (i.e., life, annuities, and property and casualty segments); excludes banking and capital markets
  • Services: Large (TCV > US$25 million), multi-year (>three years), and annuity-based application outsourcing
  • Geography: Global
  • Service providers: 20 leading insurance AO service providers

Everest Group PEAK Matrix for large insurance AO relationships


This report is structured across three key sections, each containing insights on the insurance AO service provider landscape, focusing on large-sized contracts:

  • Insurance AO service provider landscape: Analysis of individual service provider capability and service provider groups across the following dimensions:
    • Scale
    • Scope
    • Domain investments
    • Delivery footprint
    • Buyer satisfaction
    • Market success
  • Analysis of each of the categories on Everest Group’s PEAK Matrix – Market Leaders, Major Contenders, and Emerging Players. Additionally, this year’s report focuses on identifying the 2013 “Star Performers” in insurance AO. Key aspects covered include:
    • Commentary on the capabilities of each service provider
    • Delivery capability characteristics (scale, scope, domain investments, buyer satisfaction, and delivery footprint)
    • 2013 “Star Performers” analysis
    • Market success characteristics (transaction activity)
  • Implications for key stakeholders: Implications of the trends on buyers and service providers

Market share of providers in large active insurance AO contracts

Some of the findings in this report are:

  • All the four service provider categories witnessed robust growth in insurance AO revenue in 2012 – offshore majors (~20%), global majors (~10%), tier-2 Indian providers (~10%), and regional players (~25%)
  • All service provider categories focused on strengthening their suite of proprietary solutions by launching new proprietary solutions (primarily related to SMAC). Service providers also invested in targeted acquisitions and forming new alliances
  • Leaders continue to capture more than 60% of the market share by ACV and TCV
  • On an average, Leaders have more than three times the FTEs as compared to Major Contenders, however, the revenue differential is only a little more than double
  • Based on Year-on-Year (YoY) movement of different service providers on PEAK Matrix, Everest Group identified four service providers as the “2013 Insurance AO Market Star Performers” – HCL, L&T Infotech, TCS, and Tech Mahindra. These service providers witnessed a significant improvement in their scale, domain expertise, and market success

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