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Posted by Ellen Carney on December 13, 2011
The insurance industry is in the midst of some big changes. Those changes introduce very new pressures, priorities, and uncertainties into an industry whose business depends on stability. In these dynamic times, carriers hang their hat on what they do for their customers, even if how it gets done and who does it might be changing. Our report, "Tech Opportunities In The North American Insurance Industry", outlines the top business priorities and supporting technology investment plans of North American insurers. In this year's study (our fourth) it turns out that:
Industry’s business outlook turns strongly positive with select IT spending following along. Even with a record number of disasters that have translated into record economic losses, more US and Canadian insurers have positive outlooks when compared with last year. What’s behind these buoyant outlooks? By all indications, it looks like insurers will be competing on something other than price, as the market condition changes to “firm” and even “hard” for some lines. This year’s top initiative remains growing the business, with ebusiness teams playing a starring role.
Technology’s value shifts to sales, service, and support, not simply cost-savings. Five years ago, the IT’s fundamental value proposition was as a means to take cost out of the insurance equation. While still important, virtually all the insurers we surveyed told us that technology was critical to how they serviced and supported their customers, and 80% told us that technology was essential in the insurance distribution and sales model.
Innovation and intelligence of keen interest to insurance IT decision-makers. Insurance IT shops are now tasked with identifying innovations to improve how the “what” of insurance—business capabilities—are delivered. Business accelerators like business intelligence and analytics are capturing the biggest share of IT budget spending increases, while streamlining IT operations is an important funding source for business innovations.