Additionally, when analysts ask CIOs where they are investing their tech budgets, "we are finding that CIO priorities are not in line with CEO objectives. CIOs tell us that their major issues are privacy, security breaches, regulatory compliance and how to deal with business disruptions," said Ms. Harris-Ferrante, while CEOs cite retaining customers and growing revenues. "That's like number seven [for CIOs] compared to all the operational areas they are focusing on."

The problem today, she said, is that "we can talk about great deeds, looking at new customers and growing market share, but the reality is we are spending more time on operations. That's where our technology money is going."

When it comes to the IT budget, the challenge is to realign the percentage of spending for maintenance with investments in transformation projects that can grow the business long term, noted Todd Eyler, vice president of financial strategies for Gartner, Inc. "When you look at a typical IT budget, a big chunk is dedicated to just keeping the lights on," he said.

Still, the smartest companies are those that look ahead and launch initiatives to improve their systems, according to the panelists, who said such forward-thinking efforts will pay dividends very soon.

"The smartest companies--those that will be leaders in five years--are really focused on aggressively consolidating the back office," said Mr. Eyler. Indeed, the panelists warned that focusing on revenue growth without also paying attention to policy administration, claims and other support functions will prevent carriers from fulfilling their promises to new customers.

The panelists advised that CIOs must deal with a new regulatory environment, which offers opportunities to streamline business data management, but at the same time can drain resources that could go to broader and strategic information technology projects.

"Now, for example, mutual insurers have to respond much more like a publicly traded company than in the past. Regulations are demanding it. If you can't get a view into your financials across your organization easily at any given time during the day, you know you will have some problems," said Matthew Josefowicz, manager of the insurance practice at Celent Communications.

Ms. Harris-Ferrante, also noted that the reason insurers are still coping with inefficiencies such as duplicate data entries is that "application systems and developments of standards like those from ACORD have all been works in progress in the last few years," she said. However, she noted, the industry is just at the point where standards initiatives are coming together.

"This gives us an opportunity to put the systems together and have the data flow seamlessly through the organization, and to have it in a common standardized format," she said. "So, I think we are just now at the turning point where we can start tackling this head on."

Cynthia Saccocia, research director for insurance at TowerGroup, observed that when she talks to insurer CIOs, she notices they are starting to incorporate more language similar to that heard in the manufacturing sector--such as comparing their processes to a conveyor belt--and as a result to embrace more efficient data-management systems.

"They are talking about moving data and information on the conveyor belt and moving away from double-data entry and get away from separate silos," she said.