The Indian offshore insurance services (BPO) industry is estimated to be worth $690 million in 2006, and is expected to grow at a CAGR of 30% a year up to FY2010, according to Dublin-based consultants, Research and Markets. The growth will be driven by the need to reduce costs, differentiate products in an increasingly competitive environment and ensure regulatory compliance.

The research also expects insurance outsourcing from the U.K. and Europe based insurance carriers to grow faster than U.S. based insurance carriers in the next two to three years. This business will increasingly seek new, innovative business arrangements, which are hybrids between captive and third-party models.

The report further states that in the future, there will be a rising trend toward outsourcing of higher-end processes such as underwriting, actuaries and analytics to the larger third-party BPO vendors, who are fast gaining capabilities in these areas.