The incidence of outsourcing, offshoring and onshoring on company's risk policies: approach in the insurance sector

Abogados Mercantil y de la Empresa

Resumen

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Current context of outsourcing and offshoring of services. Advantages And Disadvantages Of The Outsourcing And Offshoring Of Services. Outsourcing And Offshoring: Experiences In The Insurance Market. How To Manage The Risks Involved In Outsourcing Services. 1. Define and evaluate the objectives, from the short to long term. 2. Define the activities eligible for outsourcing and/or offshoring. 3. Define an action and control plan. Insurance Solutions For The Risk Involved In Outsourcing Services. Summary and Conclusions. 1. Capitalise on all the advantages offered by outsourcing and/or offshoring like other countries of the English speaking world and Western Europe. As we have already analysed above, the main advantages are:. 2. Benefit from the experience built up by other insurers in terms of the functions to be outsourced. The main candidates are: 3. Manage the inherent risks of the subcontracted activities by professional risk and insurance managers, responsible for applying the prevention policies and designing the best insurance coverage. As we have also seen above, this involves: 4. Lastly, in view of the lack of experience of many companies in Spain, once the decision to outsource and/or offshore certain services has been taken, it is advisable to do so according to one of the following models:

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Extracto

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The incidence of outsourcing, offshoring and onshoring on company's risk policies: approach in the insurance sector

Current context of outsourcing and offshoring of services

Market globalisation, the internationalisation of companies and the economic and financial hardships currently being suffered by most firms are all factors fuelling an ongoing world trend towards outsourcing and offshoring/onshoring in industry, now spreading to all service activities.

In the broadest sense, outsourcing and offshoring/onshoring is a process whereby firms choose to contract out non strategic services to subsidiary companies or other companies, whether at home or abroad, instead of dealing with them within the firm itself, seeking such advantages as lower costs, better adapted infrastructure and the ability of concentrating on its core activity, etc.

The following table summarises the commonest scenarios in terms of organising and placing the service, in the interests of a better understanding of the terms employed:

OFFSHORING AND OUTSOURCING SERVICE SITEORGANISATION OF THE SERVICEWithin the companyOutside the companyHome countryThe service is carried out within in the firm and in the home countryThe service is contracted out to third parties in the home country (onshoring)Located abroadThe service is carried out by a foreign subsidiary in another countryThe service is contracted out to a third party service provider in another country, either a local firm or foreign subsidiary of another multinational companyOffshoringIn...

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