Insurers Adopt GCCs to Address AI Needs, Strengthen Operations

Insurance enterprises are partnering with service providers to establish global capability centers (GCCs) that can attract AI resources, reduce costs, expand capabilities and improve operational resilience amid market changes and economic uncertainty, 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 2025 ISG Provider Lens global Insurance Services – Strategic Capabilities (Insurance GCCs by Service Providers) report finds that insurance carriers are adopting GCC implementation models offered by providers to address current and future business challenges. Inflation, shortages of AI and other skills, new competitors and rapid advances in AI challenge traditional approaches to expanding operations. Many carriers are establishing GCCs in phases to allow for faster setup, more predictable costs and lower risk.

“AI capabilities are crucial to staying competitive in the insurance industry, but many insurers lack the technology resources to achieve them while managing legacy systems and meeting operational demands,” said Dennis Winkler, director, Insurance, at ISG. “GCC models provide practical options to add AI and other capabilities quickly and integrate them over time.”

Insurers are choosing among several provider GCC models depending on their needs and capabilities. These include build-operate-transfer (BOT), build-own-operate-transfer (BOOT), build-operate-transform and transfer (BOTT) and capability center as a service (CaaS). These models allow carriers to take advantage of providers’ offshore expertise while retaining essential capabilities in underwriting, claims and customer support. Insurers can enjoy immediate financial benefits during the provider-managed phase and additional savings after GCCs are transferred to captive control.

Insurers in developed markets, especially North America and Europe, are addressing talent shortages by establishing GCC operations in regions with strong education systems and deep labor pools, ISG says. These locations offer access to skilled underwriters, actuaries and technology professionals. Providers build teams through established recruitment channels, staffing GCCs in three to six months, far more quickly than insurers can through direct hiring.