Goldfinger's strategy involved fatal nerve gas delivered by gorgeous female pilots, the near vertical bifurcation of 007 with an industrial-strength laser, and the irradiation of the entire gold reserve with an atomic bomb (guarded by an insidious chauffeur with an odd name and lethal headgear). Now, here's the evil-genius part: If the gold were rendered radioactive (untouchable for 100 years), that would drive up the price, making Goldfinger's own gold holdings worth much more.

That grand plan–like many such schemes–didn't work, but such failures, real or fictional, don't deter those who see a fat pot of gold at the end of some rainbow. One such prize in today's world is the information technology budgets of the insurance industry, and the two key plotters are familiar ones–Microsoft and IBM.

According to a report from Tower-Group earlier this year, IT spending in insurance for the U.S. alone is expected to be $36.4 billion–and that doesn't include spending by agents, TPAs, and other parties. It's only a little more than half of the Fort Knox holdings but apparently still worth going after.

IBM has long been a player in our industry, selling and later supporting the mainframe technology that continues to be in place at many insurance companies. About two years ago, however, it began saying it was more interested in talking about the insurance business (as opposed to why insurance companies should buy IBM products). This shift in marketing strategy paralleled the vendor's larger theme of delivering services first and products second.

As recently as May 2004, Microsoft still was touting the advantages of its .NET technology over archrival IBM's offerings. At last year's ACORD LOMA conference, Microsoft brought together lots of media in a lush Las Vegas hotel suite and made the case for its platform while bashing IBM.

Why the aggressive push on the insurance industry? “It's been the most profitable vertical for IBM,” said Dennis M. Maroney, insurance industry managing director for Microsoft's Financial Services Group. “It makes sense for us to move in, [too].”

Even so, the Microsoft message was, “We've got superior technology,” that
is, until the 2005 ACORD LOMA con-ference. In an interview with National Underwriter at that conference, Kevin Kelly, managing director of the U.S. insurance industry for Microsoft's Finan- cial Services Group, had a different message.

“We want to talk about business,” said Kelly. Although he felt Microsoft had made a strong technology case to the insurance industry, he noted the company now wants to “refocus on business.” As part of that strategy shift, Microsoft launched its “experience Insurance” initiative, designed to improve carriers' “customer, employee, and operations experience.”

Part of that initiative, said Kelly, will be to begin competing on middleware that can help carriers link legacy applications to newer systems without a complete systems overhaul. Interestingly, that's one of the things IBM does. Further, Microsoft wants to emphasize ROI in claims processing and to focus on building agency/carrier trust.

So, now we have both IBM and Microsoft looking at things from a business perspective and enabling insurers to make the most of their legacy systems. At ACORD LOMA, both vendors were lining up their partners (other vendors that are using or complementing their technologies) and stating their business cases to the insurance industry.

Make no mistake, however, this still is about the roughly $36 billion pot at the end of the rainbow, and it still is about technology. As Microsoft's own announcement noted, it is continuing “efforts to become the preferred enterprise provider for the insurance industry.”

A battle is shaping up as these two players jockey for position. Unlike Goldfinger's nefarious plan, however, this is a welcome development. It will pump more money and energy into the insurance technology sector and help the insurance industry to improve business processes in the long run.

So, let the gladiators fight and take as much gold as they can. The real winner is the insurance industry.

Ara C. Trembly is technology editor for National Underwriter's property/casualty and life/health editions. He may be reached at [email protected].