What’s New: In Brief (August 29, 2008)

A.M. Best Co. has placed York Fire & Casualty Company’s financial strength rating of B (Fair) under review with developing implications.This rating action is a result of the recent announcement by Kingsway Financial Services Inc. to sell York Fire to La Capitale Compagnie d’Assurance Generale, an A.M. Best release says.York’s ratings will remain under review pending completion of the transaction, which is subject to regulatory approval, it adds.

The insurance industry, which has lagged behind others in outsourcing business and technology processes abroad, is now the fastest-growing offshore service sector, with a compound annual growth rate (CAGR) of 33%.Brown-Wilson Group’s 2008 Black Book of Outsourcing analyzed data from more than 100 insurance outsourcing vendors serving global insurers.”Overall, global insurance outsourcing is growing at a CAGR of 8%, [and is] expected to become a US$24-billion industry next year,” a Brown-Wilson release says. “Onshore sourcing relationships are the favoured destination of 91% of insurance firms, while 9% elect to have suppliers from abroad. However, that mix is shifting at a breaking pace.”Offshore data security, the complexities of managing risks, cultural barriers, compliance requirements and reliability are still viewed as offshoring drawbacks of 95% of insurance users. Almost 97% of onshore clients say they would consider offshore vendors if these issues manifested improvements.