North American Life and Retirement Insurers Prioritize Stability with Phased Modernization Programs

Key Terms

bpo financial

Business Process Outsourcing (BPO) is when a company hires an outside firm to handle routine operations—like customer service, payroll, or IT—so the company can focus on its core work. For investors, BPO matters because it can lower costs, speed growth, and change profit margins, but it also introduces risks around service quality, data security, and loss of control, similar to hiring a contractor to run a critical part of your business.

tpa financial

tPA (tissue plasminogen activator) is a medicine that helps dissolve blood clots by activating the body’s clot-breaking system; think of it as a chemical drain opener for blocked blood vessels. Investors care because tPA-related drugs and devices face strict approval, safety and usage rules that can drive sales, influence legal risk, and change the outlook for companies developing stroke and cardiovascular treatments.

pension risk transfer financial

A pension risk transfer is when a company pays an insurer to take over its obligation to pay retirees, effectively handing off future pension payments in exchange for a one-time fee. It matters to investors because it removes a long-term, uncertain liability from the company’s balance sheet and shifts the funding and longevity risk to the insurer, like moving a mortgage from a homeowner to a bank, which can make the company’s finances more predictable and change cash needs and valuation.

third-party administrator financial

An independent firm hired to handle the day-to-day administration of employee benefit plans, insurance claims, or retirement accounts on behalf of another company or insurer. Like a property manager who takes care of tenants and maintenance, a third-party administrator processes claims, manages paperwork and compliance, and controls how smoothly benefits operate—factors that can affect a company’s costs, regulatory risk and financial predictability for investors.

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Carriers partner with outsourcing providers to improve long-term operational resilience while deploying well-governed AI, ISG Provider Lens^® report says

STAMFORD, Conn.--(BUSINESS WIRE)-- North American life and retirement (L&R) insurers are reshaping their sourcing and operating models for strong oversight of long-duration obligations while managing growing administrative complexity, according to a new research report published today by Information Services Group (ISG) (Nasdaq: III), a global AI-centered technology research and advisory firm.

The 2026 ISG Provider Lens^® Insurance Services — Life and Retirement BPO and TPA (third-party administrator) report for North America finds that insurers are adopting AI-enabled operating models to improve administrative efficiency while maintaining the accuracy and control required for long-term policy servicing. As regulatory expectations intensify, insurers are embedding automation and AI into core administration processes with human oversight and auditable decision-making. Resilience, transparent controls and consistent service delivery are becoming core operational model requirements.

“North American insurers are adopting AI selectively, with a ‘my data with my people behind my firewall’ approach,” said Dennis Winkler, director, Insurance Industry, at ISG. “Companies are looking to providers with deep insurance expertise to help them adopt AI to improve operational performance while reducing costs.”

Many insurers are expanding outsourcing, as well as and TPA and pension risk transfer arrangements, to manage the growing operational complexity associated with mature and closed books of business. These portfolios require sustained servicing accuracy and dependable payout administration, because errors can have significant financial, regulatory and reputational consequences. TPA and pension risk transfer transactions have policy conversion requirements involving transition quality, data integrity and customer service continuity.

As enterprises modernize administration environments, they are pursuing phased approaches rather than large-scale platform replacements. Carriers increasingly choose strategies for workflow orchestration, platform coexistence and conversion strategies that reduce implementation risk to keep established systems stable. This allows organizations to improve servicing capabilities while maintaining complex product portfolios and technology estates.

Insurers are implementing AI and automation for underwriting, customer support, payments, exception management and servicing of policies. Their AI strategies are focused on incorporating human oversight, auditable decision records and control mechanisms to support accountability and operational consistency. These organizations increasingly seek integrated operating layers that can scale efficiently while supporting regulatory requirements and service reliability, ISG says.

“Successful modernization in life and retirement insurance depends on balancing efficiency with control,” said Sandhya Navage, ISG lead research specialist and lead author of the report. “Providers that deliver disciplined execution with integrated automation are helping insurers improve performance while maintaining the standards required for long-term administration.”

The report also explores other trends affecting life and retirement insurance services in North America, including increasing demand for outcome-based performance measurement and growing use of differentiated operating models tailored to specific portfolio risk profiles.

For more insights into the challenges faced by life and retirement insurance enterprises in North America, along with ISG’s advice for addressing them, see the ISG Provider Lens Focal Points briefing here.

The report evaluates the capabilities of 30 providers across two quadrants: Insurance Services — Life and Retirement (L&R) BPO and Insurance Services — Life and Retirement (L&R) TPA.

The report names Accenture, Cognizant, DXC Technology, EXL, Infosys, Sutherland and WNS, part of Capgemini as Leaders in both quadrants. It names Davies Group, NTT DATA, TCS and Zinnia as Leaders in one quadrant each.

In addition, IBM is named as a Rising Star — a company with a “promising portfolio” and “high future potential” by ISG’s definition — in two quadrants.

In the area of customer experience, Sutherland is named the global ISG CX Star Performer for 2026 among insurance services providers. Sutherland earned the highest customer satisfaction scores in ISG's Voice of the Customer survey, part of the ISG Star of Excellence™ program, the premier quality recognition for the technology and business services industry.

Customized versions of the report are available from DXC Technology, Sutherland and WNS, part of Capgemini.

The 2026 ISG Provider Lens Insurance Services — Life and Retirement (L&R) BPO and TPA report for North America is available to subscribers or for one-time purchase on this webpage.

About ISG

ISG (Nasdaq: III) is a global AI-centered technology research and advisory firm. A trusted partner to more than 900 clients, including 75 of the world’s top 100 enterprises, ISG is a long-time leader in technology and business services that is now at the forefront of leveraging AI to help organizations achieve operational excellence and faster growth. The firm, founded in 2006, is known for its proprietary market data and research, in-depth knowledge and governance of provider ecosystems, and the expertise of its 1,500 professionals worldwide working together to help clients maximize the value of their technology investments.

View source version on businesswire.com: https://www.businesswire.com/news/home/20260629233710/en/

Press Contacts:

Laura Hupprich, ISG
+1 203-517-3132
laura.hupprich@isg-one.com

Erik Arvidson, Matter Communications for ISG
+1 978-518-4542
isg@matternow.com

Source: Information Services Group, Inc.