Few insurers plan to allocate their technology budget towards seeking qualified talent, revealed an Xchanging survey conducted at this year’s Acord-Loma conference held in May. Although 67% of respondents reported a predicted increase in IT budget, just 11% ranked attracting top talent as a priority.
The company polled 75 insurance industry practitioners at the event. Most represented life and annuity (40%) and P&C (38%) insurers, but a small amount (3%) was from reinsurance or large commercial carriers. About one-quarter of respondents were at the director or project manager level, 27% consisted of executives, 16% was IT staff and the remainder was composed of analysts, brokers and agents.
“The biggest surprise was that only 11% of respondents selected attracting qualified talent as their top priority given the talent gap that exists in our industry,” wrote Jenna Richardson, director of North American Insurance Services at Xchanging, in an email to I&T.
Another surprising statistic, Richardson noted, was just 8% of respondents considered cybersecurity a top priority. This will continue to be a pervasive issue as more products enter the cybersecurity marketplace, she says, but there is plenty of room for advancement there. “Many of these ‘solutions’ are fixes for the day as attacks become more sophisticated,” she explains.
In the wake of security breaches such as the one at Target, businesses have begun to procure cyber liability policies for data protection. The insurance industry has experienced few major security issues, but there is a real risk of cyber attack, Richardson says.
Research revealed the most popular areas of tech investment were predictive modeling and analytics (42%) and big data (25%). Thirty-six percent of respondents claimed big data and analytics have the greatest likelihood of increased investment for this year.
About a third of respondents claimed that non-conventional sources would pose the greatest threat to insurers. Common examples include entities such as Google, agencies, banks and insurance marketing teams, but survey responses also listed PaaS tech vendors, global brokerage firms, standards organizations and industry associations.
“We have seen a number of non-traditional sources entering the market in the past year alone,” says Richardson, citing Walmart and Overstock.com as recent example. “The market is going to get even more crowded and as non-traditional insurers continue to jump in the game, traditional insurance companies will need technology enablers to help them differentiate.”
Kelly is an associate editor for InformationWeek. She most recently reported on financial tech for Insurance & Technology, before which she was a staff writer for InformationWeek and InformationWeek Education. When she's not catching up on the latest in tech, Kelly enjoys ... View Full Bio