Carriers need to get all these jobs done, but increasingly the option is to look at what is not considered a core competencythe thing that makes the insurer different from anyone elseand find an external party that can help with those jobs.

So much of outsourcing for American companies is being done on foreign soil, and Harris says India is still the country of choice. As the United States wages war in Iraq, questions about moving a segment of business offshore are making some insurers nervous. She says many insurers that were planning on outsourcing offshore are waiting until the dust settles. Those that already have projects in place are considering more disaster recovery/risk mitigation backup policies than what they had previously, says Harris.

Mexico and China are considered near-shore and were thought to be moving up in the world of IT outsourcing, but Harris doesnt see any growth in those markets. Nine times out of 10, when somebody is asking me about outsourcing, they are asking about offshoreIndia, says Harris.

Companies that have not used outsourcing typically start slowlylow-level business process outsourcing (BPO), says Harris. As they become more comfortable, they either move into bigger areas or move offshore. They want to jump in and get their feet wet with something that is close and easy. As they become more confident with the process, thats when we start seeing them look more toward offshore or different variations.

Harris believes the best model is one that blends environments. You shouldnt look completely offshore or onshore, she says. The best way to get a return on outsourcing is if you have a blended model where you use the best of both worlds.