This year's spring trade show season (ACORD LOMA Insurance Systems Forum and IASA Conference and Business Show), wrapping up this week with the IASA event in Seattle, has not struck me as particularly memorable in terms of earth-shaking -- or industry transforming -- technology announcements. That's not to say that things are standing still, technology-wise.At both conferences there was been plenty of news about systems upgrades and new features and capabilities. There was clear evidence that SOA is making significant inroads in the insurance industry, as well as encouraging signs that STP is getting closer to being a reality at many companies. Talking to exhibitors, attendees, and association executives, it is evident that critical technology-related concepts such as standards, business process management (BPM) and customer-centricity are being embraced and implemented. Still, it is hard for me to identify any emerging technology trend or development that has emerged over the past three weeks at these two industry events.
Still, there have been some frequent conversational topics, most of which would fall under the thematic umbrella, "Where is the industry going and what's going to happen with technology spending?" One gets the sense of waiting for several shoes to drop. The anxiety, of course, is related to a number of macro factors -- the subprime mess and related global credit crisis and the prospects of more and stricter financial services-related regulation; the upcoming presidential election; the economic downturn, including concerns about both recession and inflation -- as well as some issues that are more "micro," such as industry consolidation among both carriers and technology solutions providers. At both shows, many people asked me what I thought about the prospects for more vendor mergers, for carrier acquisitions, for insurance IT budgets, and for executive job security.
While I'm reluctant to stick my neck out too far in terms of specific predictions, it seems to me that right now insurers probably can breathe a bit easier than their counterparts in the banking and capital markets industries. According to the "Budgets, Benchmarks, and Business Priorities For Insurer CIOs 2008: U.S. Property/Casualty Edition" research report from Novarica that was released in partnership with IASA, "IT budgets are holding steady at 3 percent of premium." In the P&C segment, spending continues to be focused on initiatives such as policy administration system replacement, e-business and underwriting -- areas that are essential to both driving customer retention and growth and responding to compliance and risk management requirements. This could be seen as "business as usual" but in such a tough climate that probably should be considered a good thing.
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio