As ominous economic indicators continue to financial services horizon, insurance technology officers remain remarkably optimistic, as measured by recent Celent research findings shared by Craig Weber, senior vice president of the analyst firm's insurance group, at Insurance & Technology's Executive Summit earlier this week during a session entitled "Taking Stock: Coping with the Crisis and Looking Ahead."Celent surveyed several hundred respondents across different insurance sectors during the first, second and third quarters of 2009. When asked to assess their company's outlook from present to third quarter to a year from responding, respondents consistently reported a stable outlook growing rosier with time. While enthusiasm for the future moderated somewhat by the third quarter survey, optimism remained intact.
Similarly, when asked how the financial crisis would affect IT projects, only small percentage thought the impact would be high, while roughly half saw a moderate to low impact over the three quarter iterations of the survey. Drilling down into areas of investment, Weber reported that there was high activity in a number of areas, including analytics. That area, he remarked, "is hot, hot hot. People seem to be investing in this area up to 20 percent more than a year ago, and about 45 percent said it was an area of high investment."
These recent findings more or less confirm the outlook that has prevailed since budget season 2008: the insurance industry hasn't been hit as hard as other financial services sectors, and despite a very uncertain economic outlook, well-capitalized insurers are moving forward with transformational initiatives.
Weber's presentation also inadvertently called out the differences between the insurance sectors. During the question and answer period, the CIO of a major life insurer expressed skepticism about optimistic budget predictions. Weber explained that he was averaging the results of all responses, a significant proportion of which were from P&C insurers.
As bad economic news continues to arrive - such as unemployment cracking 10 percent - its understandable that optimism faded in Celent survey respondents, if only a small amount. No one knows what the future will bring, but as insurers finalize their budgets, Celent's information confirms the pattern set last year: insurers remain cautious about discretionary spending, they are exercising greater financial diligence and slowing their technology investment decision-making, but in terms of larger modernization efforts, they are staying the course.Celent surveyed several hundred respondents across different insurance sectors during the first, second and third quarters of 2009. When asked to assess their company's outlook from present to third quarter to a year from responding, respondents consistently reported a stable outlook growing rosier with time. While enthusiasm for the future moderated somewhat by the third quarter survey, optimism remained intact.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio