Sourcing Strategy

For insurance companies operating in today’s highly competitive environment, an effective sourcing strategy is paramount to ensure sustainable growth and profitability. An astute sourcing strategy helps insurers delineate between roles that are core to their business, which should be insourced, and those that can be outsourced for better efficiency and cost structures. Furthermore, by considering offshoring for specific roles or tasks, companies can tap into global talent pools and leverage cost advantages inherent in certain geographies. This strategic decision-making not only optimizes overall operational costs but also ensures that the company retains critical competencies in-house while leveraging external expertise for enhanced scalability and agility.

Case Study

Client: A mid sized P&C insurance carrier had digital assets like online quote and bind, customer

Problem statement:

Client wanted us to broadly answer three questions.

1.What areas/skills I should insource vs outsource?

2.How can I reduce overall cost?

3.Should I offshore? What work/roles I should offshore?

Client had relationship with one global vendor for a long time. Recently started engaging other vendors. CIO had a mandate to reduce expense and improve quality and speed to market.

Our Approach

Current state analysis
– Current landscape from the perspective of people, process, technology and initiatives
– Business strategy and IT strategy
– Feedback and challenges from the customer on the vendor (reviewed internal scoring)
– Collected all the spend data for IT – details at the level of person, role, vendor, rate, engagement/project
– Compared vendor rates to industry benchmarks
– Models and options for sourcing with cost and benefits view
– Core vs context and identified key roles
– Identified key features and the needs for realizing them on a mobile app.
– Alignment on the strategy and documenting final recommendation
– Strategies for vendor negotiation.
– Helped negotiate a win-win deal between the largest vendor and the client.
– Identified key roles that was insourced.
– Identified key roles that was context and moved to offshore.


  • Reduced vendor cost by $3M annual based on rate reductions.
  • Pushed work that was non-core to offshore and helped reduce overall IT spend.
  • Improved ratio of employee vs contractor that helped retain knowledge.