Should Your Insurance Agency Build an Internal IT Team or Outsource IT Support?
For most insurance agencies with 25–50 employees, outsourcing IT to a managed service provider is usually more practical than relying on a single internal IT employee. An MSP can provide help desk coverage, cybersecurity expertise, Microsoft 365 administration, backup management, vendor coordination, and strategic planning through one service agreement.
An internal IT hire may make sense when the agency needs a technology professional onsite every day, operates highly customized systems, or has enough recurring work to justify a dedicated position. Some agencies benefit most from a third option: co-managed IT, where an internal employee handles business-specific priorities while an MSP provides additional support, security, monitoring, and specialized expertise.
The decision should be based on five factors: support coverage, required expertise, cybersecurity risk, total cost, and the agency’s growth plans.
The 3 IT Staffing Models Available to an Insurance Agency
- Fully outsourced IT: An MSP manages day-to-day support, monitoring, cybersecurity, backups, cloud systems, vendors, and planning.
- Internal IT: One or more agency employees perform most technology responsibilities.
- Co-managed IT: Internal staff and an MSP divide responsibilities according to skills, capacity, and business priorities.
No model is automatically right for every agency. The strongest choice is the one that assigns every critical responsibility to a qualified person or team without leaving gaps in support, security, recovery, or planning.
Quick Comparison: Internal IT Versus an MSP
| Factor | Internal IT Employee | Managed Service Provider |
|---|---|---|
| Business knowledge | Can develop deep knowledge of agency workflows and employees | Learns the environment while applying experience from multiple organizations |
| Availability | Limited by work hours, meetings, vacation, illness, and turnover | Can provide a staffed help desk and after-hours coverage |
| Technical breadth | Depends on one person’s experience | Provides access to help desk, cloud, network, security, and project specialists |
| Onsite presence | Available onsite during normal working hours | Remote-first support with onsite assistance according to the agreement |
| Cybersecurity | May be one responsibility among many | Can provide dedicated tools, monitoring, processes, and specialists |
| Continuity | Knowledge may be concentrated in one employee | Uses shared documentation, standardized systems, and team coverage |
| Cost structure | Salary, benefits, recruiting, training, tools, and backup coverage | Predictable monthly fee based on users, services, and complexity |
| Strategic planning | Depends on the employee’s experience and available time | May include scheduled technology reviews and virtual CIO guidance |
The 5-Part Framework for Choosing the Right IT Model
1. Determine How Much Support Coverage the Agency Needs
Begin by identifying when employees need assistance and how long the agency can operate while a technology problem remains unresolved.
Consider:
- Normal office hours
- Employees working early, late, or on weekends
- Remote and hybrid employees
- Multiple branch offices
- Producers working while traveling
- After-hours claims or client service
- Critical renewal and enrollment periods
- Leadership access outside normal hours
One internal employee can only be available for a limited number of hours. Meetings, projects, lunch breaks, vacation, training, illness, and personal emergencies all reduce coverage. Even an excellent employee cannot simultaneously troubleshoot an executive’s laptop, investigate a security alert, replace network equipment, and help several other employees.
An MSP can reduce this dependency by providing a team-based support model. 911 IT’s managed IT services include proactive management and access to live support rather than depending on one individual.
Calculate the Agency’s Support Demand
Review the previous 6–12 months of support activity and estimate:
- Average number of employee requests each week
- Number of urgent incidents
- Time spent onboarding and offboarding employees
- Hours spent coordinating with software vendors
- Time required for computer setup and replacement
- Hours spent on security and backup management
- Time required for planned technology projects
An agency with modest daily support needs may not have enough work to justify a full-time internal position. However, the agency may still require access to several technical specialties when complex problems occur.
2. Identify the Skills Required
Insurance agency technology covers more disciplines than routine computer troubleshooting. A complete IT function may require knowledge of:
- Windows computers and servers
- Microsoft 365
- Microsoft Teams, SharePoint, and OneDrive
- Network and firewall management
- Cybersecurity monitoring
- Email security
- Identity and access management
- Backup and disaster recovery
- Cloud applications
- VoIP phone systems
- Insurance software integrations
- Vendor management
- Technology budgeting and planning
- Cyber insurance security controls
Finding one employee with deep expertise in every area is difficult. More commonly, an internal employee is strong in several disciplines and needs assistance with advanced security, cloud, networking, recovery, or project work.
The Generalist Problem
A capable IT generalist may resolve most employee issues and maintain close relationships with agency staff. The risk appears when that employee is expected to be the help desk technician, cybersecurity analyst, network engineer, Microsoft 365 administrator, backup specialist, project manager, and strategic advisor at the same time.
The agency should distinguish between tasks the employee can perform and tasks that require specialist review.
3. Evaluate Cybersecurity and Compliance Risk
Insurance agencies handle policy records, financial details, claims information, identity documents, and other sensitive client data. Cybersecurity cannot be treated as an occasional project completed after routine support work.
A mature security program may require:
- Multi-factor authentication
- Endpoint detection and response
- Email filtering and anti-phishing protection
- Vulnerability scanning
- Patch management
- Firewall management
- Security awareness training
- Device encryption
- Backup monitoring
- Recovery testing
- Incident response planning
- Security event investigation
When security depends on one internal employee, ask who monitors alerts while that person is unavailable. Also ask who independently reviews configurations, permissions, backups, and administrative practices.
An MSP can provide layered security tools and team-based processes through managed cybersecurity services. This does not remove the agency’s responsibility for risk, but it can provide additional expertise, monitoring, and accountability.
Separation of Duties
Cybersecurity improves when one person does not control every system without review. For example, the same employee should not be the only person who configures backups, receives failure alerts, tests recovery, and reports whether the backups are reliable.
An external provider can add independent review and reduce the risk that an unnoticed mistake remains in place for months.
4. Compare the Total Cost, Not Just Salary or Monthly Fees
The financial comparison should include every cost required to operate the IT function effectively.
Internal IT Costs
An internal employee may require:
- Salary
- Payroll taxes and benefits
- Recruiting and background checks
- Training and certifications
- Computer and office equipment
- Monitoring and remote-support software
- Cybersecurity platforms
- Backup services
- Password-management tools
- Documentation systems
- Outside consultants for advanced projects
- Temporary coverage during vacation or turnover
The salary is only one part of the total cost. The agency must also budget for technology tools and outside expertise that the internal employee cannot supply alone.
Outsourced IT Costs
Managed IT for a 25–50 employee agency may be priced per user, per device, by service tier, or through a fixed monthly agreement. Based on a planning range of $100–$275 per user per month, estimated monthly costs could include:
| Agency Size | Estimated Monthly Range | Estimated Annual Range |
|---|---|---|
| 25 employees | $2,500–$6,875 | $30,000–$82,500 |
| 30 employees | $3,000–$8,250 | $36,000–$99,000 |
| 40 employees | $4,000–$11,000 | $48,000–$132,000 |
| 50 employees | $5,000–$13,750 | $60,000–$165,000 |
The final price depends on the included support, cybersecurity, cloud administration, backups, locations, devices, applications, and strategic services. Compare the proposed agreement with the full cost of recruiting, equipping, training, and supporting an internal employee.
Hidden Cost of Unfilled Positions
If an internal IT employee resigns, the agency may need to recruit a replacement while maintaining support and security. During that period, documentation gaps and concentrated system knowledge can create additional risk.
An MSP also experiences staffing changes, but the service relationship should not depend on one technician. The provider should maintain shared documentation and assign other team members when someone is unavailable.
5. Consider Growth and Future Technology Plans
The best model for a 25-person agency may not remain appropriate when the agency reaches 50 or 100 employees, opens additional offices, acquires another firm, or adopts new platforms.
Consider expected changes during the next 12–36 months:
- Hiring plans
- Office expansion
- Remote-work growth
- Mergers or acquisitions
- Agency-management system changes
- Microsoft 365 projects
- Cloud migrations
- Cybersecurity improvements
- New carrier or regulatory requirements
- Business continuity improvements
An MSP can scale the number and type of resources assigned without requiring the agency to recruit a new specialist for every project. An internal team may provide greater daily control but must grow as support demand and technical complexity increase.
When Fully Outsourced IT Is Usually the Best Fit
Fully managed IT may be the strongest option when the agency:
- Has 25–50 employees and no internal IT department
- Needs responsive support without hiring several specialists
- Wants predictable monthly costs
- Needs stronger cybersecurity
- Relies heavily on Microsoft 365
- Has remote or hybrid employees
- Needs assistance with cyber insurance controls
- Wants backup and recovery managed proactively
- Needs vendor coordination
- Does not have a documented technology roadmap
The MSP becomes responsible for the defined day-to-day technology function while agency leadership retains business oversight and approval authority.
What the MSP Should Handle
A complete outsourced arrangement may include:
- Help desk support
- Employee onboarding and offboarding
- Computer and device management
- Microsoft 365 administration
- Network and firewall management
- Cybersecurity tools and monitoring
- Backup and recovery
- Vendor coordination
- Technology documentation
- Strategic planning and budgeting
When Internal IT May Be the Better Choice
An internal IT employee or team may be appropriate when the agency:
- Requires a technician physically present throughout the workday
- Has a large volume of hands-on requests
- Uses highly customized internal applications
- Employs developers or technical operations staff
- Needs immediate coordination with several departments
- Has enough work to keep multiple technology professionals productive
- Wants direct control over daily priorities
- Can fund training, tools, specialist assistance, and backup coverage
The agency should avoid assuming that one employee can provide every capability. An internal model may still require security consultants, project engineers, backup services, or after-hours support.
Questions Before Hiring an Internal IT Employee
- Who will cover support when this person is unavailable?
- Who will independently review cybersecurity?
- Who will monitor alerts after hours?
- Who will maintain documentation?
- Who will test backups and disaster recovery?
- Which advanced projects require outside assistance?
- What tools and licenses must the agency purchase?
- How will the agency retain knowledge if the employee leaves?
- Who will provide strategic guidance?
- How will performance be measured?
When Co-Managed IT Is the Best Fit
Co-managed IT combines an internal employee’s business knowledge with an MSP’s team, systems, tools, and specialist expertise.
This model may work well when the agency:
- Already has a trusted internal IT employee
- Needs additional help desk capacity
- Needs 24/7 monitoring or after-hours support
- Needs advanced cybersecurity expertise
- Has major cloud or infrastructure projects
- Wants backup coverage during vacation or turnover
- Needs independent review and documentation
- Wants to keep certain responsibilities internal
911 IT’s co-managed IT services are designed to supplement internal teams with additional expertise, monitoring, project support, and consulting.
A Practical Division of Responsibilities
| Responsibility | Internal IT | MSP |
|---|---|---|
| Daily employee relationships | Primary | Backup and escalation |
| Basic onsite requests | Primary | As needed |
| Help desk overflow | Escalates | Provides additional capacity |
| Microsoft 365 administration | Shared | Shared or specialist-led |
| Cybersecurity monitoring | Reviews business impact | Manages tools and investigates alerts |
| Patch management | Reviews exceptions | Operates and reports on the process |
| Backup monitoring | Confirms priorities | Monitors and tests recovery |
| Major projects | Coordinates internally | Provides design and engineering |
| Vendor management | Owns business relationships | Handles technical coordination |
| Technology planning | Provides internal requirements | Provides roadmap, risk, and budgeting guidance |
The division does not have to match this example. Responsibilities should be documented in writing so tasks are not duplicated or ignored.
The Risks of Relying on One Internal IT Employee
A single-person IT department can work well when the employee is capable and the environment is manageable. However, agency leadership should plan for several predictable risks.
Knowledge Concentration
One person may know the passwords, configurations, vendor contacts, and history behind every system. If that employee leaves unexpectedly, the agency may struggle to operate or transfer knowledge.
Limited Availability
The employee cannot provide continuous coverage. Support delays may occur during vacation, illness, meetings, projects, or simultaneous incidents.
Competing Priorities
Urgent employee problems often push security improvements, documentation, backup testing, and strategic planning to the bottom of the list.
Limited Independent Review
Configuration mistakes may remain undiscovered when the same person implements, monitors, and evaluates every control.
Skills Gaps
No professional has equal expertise in every technology discipline. Advanced networking, cybersecurity, cloud migration, incident response, or recovery work may require specialist assistance.
The Risks of Choosing the Wrong MSP
Outsourcing does not guarantee good results. A poorly selected provider may create different problems, including:
- Slow or impersonal support
- High technician turnover
- Unexpected fees
- Weak knowledge of the agency
- Limited onsite availability
- Generic security packages
- Incomplete documentation
- Frequent vendor finger-pointing
- No strategic guidance
- Long contracts with unclear service obligations
Evaluate the provider’s processes, experience, staffing, security practices, agreement, and client feedback rather than choosing solely by monthly price.
How to Compare an Internal Hire With an MSP Proposal
Create a three-year comparison that includes money, coverage, capabilities, and business risk.
| Category | Internal IT Questions | MSP Questions |
|---|---|---|
| Support | How many hours and employees can one person cover? | What are the help desk hours and response processes? |
| Staffing | Who provides vacation and turnover coverage? | How is the account covered when a technician is unavailable? |
| Skills | Which specialties require consultants? | Which specialists are included in the service? |
| Security | Who monitors, reviews, and tests controls? | Which tools and monitoring services are included? |
| Recovery | Who monitors backups and tests restoration? | What backup and recovery responsibilities are included? |
| Tools | Which platforms must the agency purchase? | Which licenses are included or billed separately? |
| Projects | Can the employee design and complete major projects? | Which projects are included and which cost extra? |
| Planning | Does the candidate have budgeting and strategy experience? | How often will leadership receive technology reviews? |
| Continuity | How is knowledge documented and transferred? | How does the provider maintain shared documentation? |
| Total cost | What are salary, benefits, tools, training, and consulting costs? | What is the complete monthly and annual cost? |
A Practical Scenario for a 35-Person Insurance Agency
Consider a 35-person independent insurance agency with one office, eight remote employees, Microsoft 365, an agency-management platform, cloud-based phones, and no dedicated IT department.
The agency estimates that it needs:
- Employee support throughout the workday
- Occasional after-hours assistance
- Microsoft 365 administration
- Cybersecurity monitoring
- Backup and recovery management
- Coordination with the agency-management vendor
- New-employee setup
- Quarterly technology planning
The agency considers hiring one IT generalist. That employee could provide strong onsite support and learn the agency’s workflows, but the agency would still need tools, after-hours coverage, advanced cybersecurity assistance, backup review, and project support.
The agency also evaluates a managed IT provider. The MSP can supply a staffed help desk, security platforms, monitoring, specialists, vendor coordination, and strategic planning through one agreement. Onsite support is available when remote assistance is not sufficient.
Because the agency does not require a technician physically present every day, it selects fully managed IT. Leadership appoints an internal operations manager to coordinate priorities and approve technology decisions.
A different agency with a highly customized environment and a strong existing IT manager may choose co-managed IT instead. The correct model depends on business requirements, not a universal rule.
A 10-Question Decision Checklist
- Do employees need a technician physically onsite every day?
- How many support requests does the agency generate each month?
- Does the agency require assistance outside normal working hours?
- Can one employee cover support, security, cloud systems, backups, vendors, and projects?
- Who provides coverage during vacation, illness, and turnover?
- What security tools and monitoring processes are required?
- How will backups and recovery be independently tested?
- What is the complete three-year cost of each model?
- How quickly will technology needs grow or change?
- Would a co-managed model preserve internal knowledge while adding specialist support?
If the agency cannot answer several of these questions, complete a technology and staffing assessment before making the decision.
Red Flags When Hiring Internal IT
- The job description includes every technology responsibility without prioritization.
- No backup coverage is planned.
- The agency expects one person to monitor security continuously.
- No budget exists for tools, training, or outside specialists.
- Administrative access will not be documented.
- Backup testing is assigned to the same person without review.
- The employee will spend all available time reacting to support tickets.
- No plan exists for knowledge transfer or turnover.
Red Flags When Selecting an MSP
- The proposal does not define included services.
- Support and escalation procedures are unclear.
- Cybersecurity is described only as antivirus.
- Onsite support availability is not explained.
- Project and after-hours fees are vague.
- The provider does not discuss backup testing.
- No one is assigned to strategic planning.
- The provider cannot explain how it documents the environment.
- The contract has no clear transition process.
- The provider does not ask about agency applications or business workflows.
Frequently Asked Questions
Is an MSP cheaper than hiring an internal IT employee?
It can be, particularly for a 25–50 employee agency that does not have enough work for several full-time specialists. Compare the MSP’s complete fee with salary, benefits, recruiting, training, software tools, cybersecurity services, outside consultants, and backup coverage.
Will an MSP understand our insurance software?
The MSP should understand the technology surrounding agency-management systems and coordinate with the software vendor when necessary. Ask about experience supporting Microsoft 365, remote access, carrier portals, Applied Epic, AMS360, HawkSoft, EZLynx, and other relevant platforms.
Do we lose control when we outsource IT?
No. Agency leadership should retain ownership of accounts, data, policies, budgets, and business decisions. The MSP performs responsibilities defined in the agreement and provides recommendations for agency approval.
Can an MSP provide onsite support?
Many MSPs provide onsite assistance when remote support is not sufficient. Confirm whether onsite service is included, limited, or billed separately.
What happens if our main MSP technician is unavailable?
A team-based provider should maintain shared documentation and assign another qualified technician. Ask how account knowledge is distributed and how escalations are handled.
Can one internal employee manage cybersecurity?
An internal employee may manage parts of the security program, but continuous monitoring, advanced investigations, independent review, and specialized tools may require outside support.
What is co-managed IT?
Co-managed IT is a partnership between internal technology staff and an MSP. Responsibilities are divided so the internal employee can focus on agency-specific priorities while the MSP supplies additional capacity, tools, monitoring, or specialized expertise.
When should an agency move from outsourced IT to internal IT?
The agency may consider internal staff when daily onsite demand, business complexity, custom systems, or growth creates enough ongoing work to justify dedicated employees. The MSP may remain involved through a co-managed arrangement.
How should performance be measured?
Track response and resolution times, recurring problems, downtime, employee satisfaction, security coverage, patching, backup tests, project completion, documentation quality, and progress against the technology roadmap.
Who should manage the MSP relationship inside the agency?
Assign an owner, executive, or operations leader to approve priorities, communicate business changes, review reports, and participate in technology planning. Outsourcing IT does not mean outsourcing leadership accountability.
Choose the Model That Covers Every Critical Responsibility
For many insurance agencies with 25–50 employees, fully outsourced IT provides the broadest combination of support coverage, cybersecurity, cloud expertise, backup management, vendor coordination, and strategic planning without requiring the agency to build a multi-person technical department.
Internal IT may be appropriate when the agency needs continuous onsite support, has specialized systems, or has enough technology work to justify dedicated staff. Co-managed IT can provide the best balance when the agency already has an effective internal employee but needs additional capacity and expertise.
Use the five-part decision framework:
- Measure the required support coverage.
- Identify the necessary technical skills.
- Evaluate cybersecurity and continuity risks.
- Compare the complete cost of each model.
- Consider growth over the next 12–36 months.
911 IT provides fully managed IT services, co-managed IT services, cybersecurity, business continuity, and cloud services for businesses that need responsive support and proactive technology management.
Not sure whether your agency should hire internally, outsource IT, or use a co-managed model? Schedule a discovery call with 911 IT to compare your support demand, staffing costs, security requirements, technology environment, and growth plans.
