[To read last year's responses from industry leaders, read 11 Burning Insurance Industry Questions That Will Be Answered in 2012]
1. What is the Right Core System Modernization Strategy?
What we saw in 2011: "Carriers are weighing their core system replacement options… from monolithic suites to best-of-breed systems, and now to best-of-breed suites"
What happened in 2012? "A trend is definitely becoming more visible although one must differentiate between Tier 1 and 2 insurers as well as by region," says Robert Cummings, head of SAP's insurance business unit. "Tier 1 insurers in North America, Western Europe and Japan continue to move toward best-of-breed systems to replace their legacy applications. In Tier 2 and the rest of the world, almost half of the RFPs coming into our company ask either about a platform for core insurance (usually meaning policy, claims, billing, reinsurance and sometimes commissions)."
In 2012, fewer than 25% of SAP's inquiries were for stand-alone components — about a two-thirds drop from 2010.
"We believe that 2013 will see a continuing strengthening of this trend, with the difference that subsidiaries of Tier 1 players will also begin to consider full suites due to the cost disadvantage of large heterogeneous systems," Cummings adds.
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio