The downturn of the economy should not decrease insurance company investments in technology solutions, according to a trio of carrier representatives.

Indeed, a bad economy is not the time to cut back on something that can help a company save money and boost productivity in the long run, said Mike Scholl, assistant vice president of claims for Nationwide Insurance, during a roundtable discussion here at the 12th Annual ACE (America's Claims Event), sponsored by The National Underwriter Company's conference division.

Mr. Scholl said Nationwide is cutting back in other areas, but not in technology.

In agreement was Rod Rupp, senior vice president at Auto-Owners Insurance Company, who said he views technology spending the same way he thinks of advertising, adding that the worst time to cut back is when sales are down.

He said he expects Auto-Owners' tech budget to hold steady, or perhaps even increase in the near future.

Jill Rasmussen, assistant director of corporate Web development for Amica Mutual Insurance Company, said her company has prioritized certain projects due to the poor economy but has not cut back in the area of technology.

She said one technology solution that has been designed but not yet deployed by Amica is a scoring tool for discovering fraud. She said it identifies certain red flags in claims, and once the indicators reach a certain threshold, the company's special investigative unit is alerted to take a closer look.

Mr. Scholl said a similar tool used by Nationwide was fine-tuned after initially throwing up too many red flags.

The professionals also discussed technology solutions for replacing legacy systems–an old computer system or application still being used because the company does not want to go to the trouble and expense of replacing or redesigning it.

Ms. Rasmussen said Amica is interested in replacing legacy systems partly because people entering the workforce who are interested in technology will view working on such antiquated equipment as a reason not to consider the insurance industry.

Mr. Rupp, when asked about replacing legacy systems with off-the-shelf solutions, said it depends on the company. Off-the-shelf systems are great, he said, but they have some issues that require certain expertise, and if a company does not have that expertise, then such solutions may not be the best fit.

There was some debate among the panelists as to whether consumers are demanding the use of the Internet for reporting claims. Ms. Rasmussen said Amica looked into the number of people reporting claims online and found no dramatic increase, but that Amica is keeping an eye on the trend.

Mr. Scholl said he is seeing more claims reported online, but he noted that the company Web site encourages customers to only report smaller claims in this manner.

Ms. Rasmussen said most consumers want to talk to a human being for the major, emotional losses. She said consumers generally need “a voice” to walk them through the process for complicated claims.

Mr. Rupp added that the trend of reporting claims online will ultimately be consumer-driven. If customers want this service, then companies will provide it–but he stressed that, in general, for now people want personalized service.