The survey showed that nearly 80 percent of IT executives are undertaking more regulatory-compliance initiatives, but that 62 percent are getting no extra funding for them. Regarding legacy systems, nearly 50 percent of IT executives said such systems continue to pose big or somewhat big problems.

The IT executives also indicated that their chief information officers and chief executive officers often don't see eye-to-eye. Half of the respondents in the survey said they were only moderately confident about aligning their company's IT and business goals for growth.

The survey also showed that many insurers lack multiyear IT strategies. While the majority of respondents said their companies have a one- or two-year plan for prioritizing IT investments, half said they don't have plans beyond that time frame.

The poll also revealed that ACORD still has a tough road ahead in developing and marketing insurance data standards. When asked whether non-IT executives at their company understand the role of ACORD standards, 55 percent of IT executives said “seldom,” while less than 30 percent said “sometimes.” More than half said they don't have a corporate industry standards compliance strategy in place.

Charles McCaig, chief information officer at the Chubb Group of Insurance Companies, commented during the panel discussion that problems revealed in the poll are all too common for insurance IT executives–challenges coming from being asked to do more with less.

“CEOs tend to view bottom-line results and take costs out, so there is an awful lot of pressure on corporate CIOs to run more efficient IT operations and take costs out,” Mr. McCaig said. He noted that Chubb's IT spending would be flat until the end of 2006, but with employee salary raises and rising vendor licenses, that effectively translates into a shrinking budget, he added.

Regarding regulatory compliance, Mr. McCaig, who is also ACORD's chairman, said the federal Sarbanes-Oxley corporate governance regulation, and the ongoing scrutiny of the insurance sector by law enforcement officials, continue to have a huge impact on insurer IT demands.

“We needed to refurbish systems to do a better job on transparency and produce data needed for compliance,” Mr. McCaig said. “I feel that we were asked to take on an enormous effort and make many changes with a deadline imposed. We didn't get additional funding, so this caused us to push aside other strategic initiatives. It was an enormous effort, and it's not over.”

Mr. McCaig acknowledged that in the course of its regulatory-compliance effort Chubb's IT system has embraced some standards, simplified processes and consolidated selected systems, which left Chubb in better shape. “It will give us more transparency. It's just that it was a rough way to get there,” he said.

Prudential Financial CIO Barbara Koster echoed Mr. McCaig's sentiments.

“Insurers' IT budgets are still flat-to-down from what I hear,” she said. “Prudential's IT budget is flat, which means we have to take dollars from somewhere else to handle Sarbanes-Oxley, Gramm-Leach- Bliley and HIPAA privacy rules. We have to find better, cheaper, faster ways to implement compliance activities, because we are not getting the money for it.”

Quotebox (with mug, get from Jason Williams)

“CEOs tend to view bottom-line results and take costs out, so there is an awful lot of pressure on corporate CIOs to run more efficient IT operations and take costs out.”

Charles McCaig, CIO at Chubb

ACORD Chairman