Their research found that an additional 6 percent of life and health insurers, and 9 percent of property and casualty insurers have plans to outsource some business processes this year.

"With increasing pressures to reduce operating costs and launch new products, many insurers are finding those objectives difficult to meet. They have inadequate internal resources, such as people and skilled workers, or they are so overwhelmed with other priorities that they simply cannot complete all the requirements in the necessary time frame,'' said Kimberly Harris, research director for Gartner.

"The insurers' top reasons for BPO [business processing outsourcing] included a lack of time, inappropriate skill sets, and faster turnaround with the use of outsourcers,'' Ms. Harris said. ``Many insurers are looking to gain competitive advantages and are using BPO and technology outsourcing services as a means to accomplish that.''

To obtain optimum return on investment from outsourcing, Gartner said insurers must have a corporate strategy that includes the reasons to outsource.

"Insurers looking for long-term ROI from BPO and information technology outsourcing will find greater success from having a corporate outsourcing strategy in place rather than haphazardly responding to institutional constraints,'' said Ms. Harris.

"Lack of a corporate vision for outsourcing will inhibit an organization's ability to find corporate value from using external service providers,'' she added.

Gartner recommends that insurers develop a business and technological agenda that includes strategies for outsourcing. Requirements should be established for any process or project that is done externally, and procedures should be developed for handling outsourcing agreements and projects.

Ms. Harris said, "The focus should be on market distinction with an emphasis on core competency rather than tactical requirements.''

"That change," she continued, "will promote greater opportunities for positive corporate-wide ROI from outsourcing and will allow an alignment of resources with the core competency.''

More analysis is available in the Gartner Research Note, "Insurance Outsourcing: Tactical Response, Not Strategic.'' The Research Note examines how insurers are leveraging outsourcing, and how they plan to do it in the future.

Gartner said additional information on the sourcing industry will be presented at the Gartner Symposium/ITxpo 2002, which will be held April 29 to May 2 at San Diego Convention Center in San Diego.

The company said that to register or get more details on the symposium, their Web site can be reached at www.gartner.com/symposium or call 1-800-778-1997.

Gartner said it has more than 11,000 clients that it helps to understand technology and drive business growth. Gartner's divisions are Gartner Research, Gartner Consulting, Gartner Measurement and Gartner Events. The firm counts 4,300 associates, including 1,200 research analysts and consultants, in more than 90 locations worldwide.