What does it take to be an effective competitor? More and more, the ability to organize, analyze and use data is the differentiator in the insurance industry. For example, meeting "market demands" is the top driver of IT initiatives in insurance, according to Matthew Josefowicz, manager of the insurance group at Celent, who presented the initial results of the analyst’s most recent CIO/CTO Priorities Study earlier this month at Insurance & Technology's 7th Annual Executive Summit.
Josefowicz defined those demands as "meeting customer expectations for service and speed, both outside and inside the enterprise; reacting to the competition and improving time to market; and improving ease of business for distributors." While accomplishing those goals requires robust and flexible architectures and effective project management and governance, the key is information management - whether information about customer demographics and buying trends, or channel profitability, or regulatory updates, or risk analysis or competitive intelligence. In 2006 insurance IT budgets will increase about 7 percent over 2005 figures, Josefowicz told the Executive Summit attendees, with a slight increase in the portion of those budgets earmarked for new projects as opposed to maintenance. High-priority projects are those focused on document/content management, business intelligence/reporting, data warehouses, network security and transactional agent portals. Again, this illustrates how essential all aspects of information management are to insurers' growth strategies.
Unfortunately, it may also illustrate just how far carriers’ have to go before they actually are able to consistently improve decision-making and overall business intelligence. At I&T we’ve been reporting for years about the difficulties insurance companies continue to encounter in their efforts to effectively, profitably and appropriately exploit the wealth (overload?) of critical customer and performance information they "own." If the Celent research is any indication, the gap may be closing - but time will tell if these strategies are executable or only aspirational.
To gain insights into how insurers can upgrade performance through better decision-making, attend I&T's December 7 editorial Webcast on "Improving Decision Making Via Real-Time Analytics." To register, click here