Enterprising Developments

No More IT-as-Usual in This New Economy

Joe McKendrick
Insurance Experts' Forum, July 19, 2010

We're still climbing out of the recent economic downturn, and times are still challenging. However, forward-looking insurance companies need to position themselves for the next growth wave ahead. Unfortunately, things won't get any easier as the economy starts to grow again; instead, markets will get even more competitive, customers will get even more demanding and margins will get even thinner.

How can a company rise above all this? Effective deployment of information technology will make the difference. That's the view of Syama Sundar, global client director for the insurance practice at Tata Consultancy Services. Sundar recently fielded some of my questions about the new economy for an upcoming special report in INN. As he put it: “ IT is one of the driving forces behind competitive advantage in the marketplace. Insurance IT executives must think about how they can bring new value from championing investments in IT that will create and sustain future business value and speak to the needs of the consumer.”

The era of IT-as-usual ended with the recent economic downturn, Sundar says, observing that productivity and cost reduction are now on the agenda of many insurance companies. However, there's a growing emphasis on enhancing customer experience and operational effectiveness that is driving new investments. Sundar expects to see areas such as policy administration transformation, business intelligence and analytics receiving top-most priority at a large number of insurers.

Expect to see more resources move to newer areas such as cloud computing and analytics, as insurers seek to achieve greater agility and operate smarter. “Cloud computing and analytics have received much needed audience within insurance companies,” he points out. “There are a good number of activities being carried out by insurers to understand 'what?,' 'when?' and 'why?'”

How can technology leaders and managers within insurance companies better work with the business in this new hyper-competitive environment? Sundar is an advocate of portfolio management and business–IT alignment. But projects need to deliver results extremely quickly to get the support they need. “Projects that can start yielding results in two to three quarters are presenting better viability to sponsors than multiyear large transformational initiatives,” he points out.

Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.

Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at joe@mckendrickresearch.com.

This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.

The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.

Comments (0)

Be the first to comment on this post using the section below.

Add Your Comments...

Already Registered?

If you have already registered to Insurance Networking News, please use the form below to login. When completed you will immeditely be directed to post a comment.

Forgot your password?

Not Registered?

You must be registered to post a comment. Click here to register.

Blog Archive

The 5 "I"s of Underwriting Innovation

Underwriting has come a long way in a short time thanks to data and analytics.

Insurers are Losing the Customer Satisfaction Battle – Can Social Media Help or Hurt?

GEICO and Progressive suffered the largest individual carrier dips in satisfaction, according to the ACSI report.

Claims Transformation: Modernization Is Just the Beginning

Claims transformation is bigger than modernization, encompassing changes to the entire claims business model and philosophy rather than simply the day-to-day processes of claims operations.

Why Insurers are Leading on Data and Analytics

A State Street survey finds insurance companies are more likely to be further along in becoming “data innovators” than their financial services counterparts.

Driverless Cars: Unintended Consequences for Insurers to Watch

When bad or unexpected or unusual things happen, the computer gives up control and hands it back to the now woefully unprepared occupant.

The Other Auto Insurance Telematics Shoe Drops

Progressive's decision to charge Snapshot drivers more if their driving data indicates higher risk has started the industry down a road of data-driven adverse selection.