What Will 2010 Bring? Not as Much as Some Hope

Ara Trembly
Insurance Experts' Forum, December 28, 2009

As this turbulent and eventful year draws to a close, I feel moved (perhaps by my sumptuous Christmas repast) to don my guru headgear and give you an educated guess as to what the coming year will bring to the technology space, especially as it impacts insurance and financial services. 

Of course, the primary determinant of what the year holds will be the U.S. economy.  The Obama Administration is trying hard to spin optimism out of current trends, but the reality is that unemployment remains at double digit levels and that many holiday seasonal hires will have been laid off by the end of January.   The stimulus packages passed by Congress have stimulated plenty of debate, but very little that I can see in terms of new jobs.  Bailouts have at least temporarily saved banks and auto companies, but the piper has yet to be paid for all that money we created out of thin air—not to mention the staggering cost of government-run healthcare.  Overall, there are more depressants than stimulants entering our economic body, thus the effects are not likely to be salutary. 

On the IT front, several sources are reporting that IT budgets will be static or slightly elevated for the coming year.  Insurers have certainly shown that they are willing to spend on items such as policy administration upgrades or replacements, but one wonders where the cuts will come from to pay for those new ventures.  Insurance tends to lag behind the rest of the economy as a rule, so it would not surprise me to see further layoffs in our industry.  Financial markets—one of the areas that hit insurers hardest in 2008-2009—seem to be rallying, but the big gains of the past seem far away.  I’m not seeing anyone forecasting a miraculous recovery for 2010, which again signals little in the way of optimism. 

My much maligned crystal ball tells me that 2010 will be a year in which we will all look for even the slightest rays of hope—and I have no doubt that we will find some.  The process of recovery and return to a robust business climate, however, will be a slow grind for industry in general, and perhaps slower for the phlegmatic insurance industry.  That said, it should be noted that insurance has remained a financially strong sector and that the uphill battle may not be as lengthy as for some other industries. 

On the technology side, I expect to see continued slow growth in the personal use of hand-held wireless devices in our industry.  This will be offset, however, by increased concerns about the poor security that comes with such devices.  It is likely that at least some enterprises will deny network access to wireless devices as a means to protect their critical data and equipment from increasingly well-organized and well-funded criminal syndicates doing their nefarious business on the Internet. 

And speaking of data security, it saddens me to say that we will continue losing battles in the war against those who seek to steal and destroy.  This is primarily because crooks can see huge profits in cyber-crime, combined with low risk of being caught.  Those profits help the bad guys do more and better research into breaching systems, while security companies exhaust themselves just trying to keep up with the overwhelming flow of malware and other types of attacks. 

It’s nice that the federal government wants to give us a cyber-security czar, but as I have pointed our previously, that individual is signing on for a war that is not winnable in its present form.  It’s going to take some kind of genius technology that we have not seen yet to level this playing field, so let’s pray that emerges soon. 

Overall, 2010 should see slight improvements in some areas.  Insurers, brokers and anyone else who does business in our field should keep their feet firmly planted on the ground, however.  The real improvements will only be evident when the employment market returns to a healthier state, enabling us to pour money and resources into critical areas like data analytics and security. 

Ara C. Trembly ( is the founder of Ara Trembly, The Tech Consultant, and a longtime observer of technology in insurance and financial services.

Readers are encouraged to respond to Ara using the “Add Your Comments” box below. He can also be reached at

The opinions posted in this blog do not necessarily reflect those of Insurance Networking News or SourceMedia.


Comments (1)

Well said. Without knowing too much about it I still believe the insurance industry is well behind the banking industry in terms of data security.

Posted by: Travis V | December 29, 2009 1:32 PM

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