A newly-released report from New York-based Celent has found that senior information technology executives in insurance are focusing on strategic spending to meet market demands.
In the fall of 2006, Celent, a research and advisory firm, said it surveyed 29 senior IT executives with insurers to provide a deep information resource about priorities, behaviors, initiatives, and infrastructures at U.S. insurers.
Overall, the respondents represented $50 billion in premium, or roughly 5 percent of the total U.S. insurance market, Celent said.
"There is continued focus on meeting market demands for speed to market and ease of doing business, and on new projects involving core systems, data mastery, and distribution," said Matthew Josefowicz, manager of Celent's insurance group.
Mr. Josefowicz, wrote the report titled "Insurance CIO/CTO Pressures, Priorities, Projects, and Plans for 2007: Survey Results."
"Budgets and staffs are generally flat or growing modestly, but strategic investments continue," he noted. "However, there are some indications that large P-C insurers may be keeping their powder dry until they can gauge the impact of the softening market."
Celent also found that top areas of significant new project spending vary by size and sector, but include initiatives focused on underwriting, claims, product development, and data mastery.
"Document handling, policy administration system replacement, ACORD XML adoption, agent portals, and BPM all show up among the most common areas of significant new project spending," said Celent.
In addition, the average insurer had approximately 15 services live within its enterprise,
The study found about half of the sample is using Web services/SOA for internal and external integration to enable new business and underwriting, the researcher noted. ACORD XML continues to play a role in more than half of these initiatives.
Celent added that the incremental mainframe migration is continuing, and Linux is becoming an important element of platform modernization, along with Microsoft Windows. "While most large insurers rely on at least partially on mainframes for their core policy systems, the overall role of mainframes continues to wane gradually," said Celent.
The 56-page report covers a broad range of areas, including detailed budget breakdowns, staffing plans and ratios, and an analysis of insurer activity in over 70 specific technology initiatives ranging from direct online sales to core systems to specific deployments of business process management and document management systems, the researcher said.
Celent, LLC publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies.
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