Since this is the first issue of Tech Decisions for the new year, it's time to focus on some amazing predictions for insurance technology in 2013.
The first bold prediction is that more insurance companies will find a way to spread more of this year's budget into securing its systems. We hate to keep harping on what happened to the folks at Nationwide, but the correct response to any hacking event isn't: "I'm sure glad it wasn't me." No, the correct response is to become more vigilant.
I heard one estimate that the hacking could cost Nationwide between $80 million and $100 million to take care of their customers. That's no Superstorm Sandy, but how many carriers have reserve funds for hacking incidents?
My second prediction is that mid-tier carriers who were hoping to get in the telematics business in the next year or so will be reassessing their position in the wake of Progressive Insurance's decision to begin licensing some of its patented technology in 2015.
Progressive is the market leader in usage-based insurance and they are vigilant when it comes to their proprietary technology. But a two-year wait for technology could be a crippling delay, particularly when you consider the fact that hardly anyone was even talking about telematics in January 2011.
My final prediction is that insurance technology departments will increase their focus on personnel this year. We've been writing for several years about how Baby Boomer technologists that grew up learning COBOL programming eventually were going to step aside and with them would go a huge amount of accumulated knowledge.
This is yet another reason why carriers need to be looking at new systems—particularly policy administration systems—that utilize newer technology.
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As you may have noticed, the new year means a new look here at Tech Decisions. We've also added a few new features as we begin our 15th year of operation.
One of the changes means we say goodbye to the news portion of the magazine—Industry Intelligence. It doesn't make much sense to try and present "news" in a magazine that is published five times a year, particularly when you can find it on an immediate basis at PropertyCasualty360.com.
We hope you like the redesigned magazine and some of the other changes we have made. Send me a note if you see something you like—or don't like.
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