Enterprising Developments

The “Great Recession” is Over: Now What?

Joe McKendrick
Insurance Experts' Forum, September 21, 2010

The verdict is in: the National Bureau of Economic Research (NBER), a panel of the nation's leading economists who are looked upon to call the “official” starts and ends to recessions, said the most recent recession—what some pundits call “The Great Recession”—ended back in June of 2009. That's not to say everything turned rosy in July of that year; that means the leading economic indicators hit their lowest points, and began to climb upward from that point. Indeed, I did not hear a lot of cheering or see dancing in the streets with yesterday's NBER's announcement—unemployment (and underemployment for that matter) remains too high, many businesses remain stressed, and many government programs are being cut. (Also, NBER added that any new downturn would be considered a new recession, not a continuation of the 2007-2009 downturn.)

Still, as I've mentioned in previous posts, the NBER announcement confirms what many industry executives and managers may already instinctively grasp—it's time to move out of the storm shelters and focus priorities once again on growth and new markets. But as I alluded to a couple of months back, this is not time for IT as usual.

Those companies that can closely integrate technology into their business to run smarter will see competitive advantage in the new economy that is emerging. Sustainable competitive advantage may come from the following areas:

•    Employing analytics to better target customer needs, life stages and prevent fraud. Analytics may help prevent future financial meltdowns by better alerting companies to risk factors.

•    Moving to public cloud, private cloud and hybrid cloud (integrating public and private cloud services) where it makes the most sense. Insurers may not need to build or maintain multiple data centers to gain access to technology.

•    Taking advantage of shared services both within and from outside the enterprise, via service-oriented architecture and Software-as-a-Service.

•    Embracing new forms of client access, such as mobile technologies, which are growing as a way to exchange data and communication with customers and between employees. INN editor Carrie Burns explores the possibilities in her latest post.

•    Leveraging social media tools to help employees collaborate on the inside as well as actively engage with customers on the outside.

•    Being open to new ideas and innovation. This is easy to say, but difficult to put into practice. Social networks may help open the doors to innovation.

The world is a much different place coming out of the Great Recession than it was going in, and those companies that are technology savvy can ride the next boom.

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.

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

Comments (4)

Will the insurance industry actually make a decision on a technology or technologies to replace current legacy systems? Or is it more likely indecision creates a combination of cloud, soa, saas, etc. that empowers the legacy monster until the next generation of technology arrives. After all aren't the vast majority of financial transactions still using Cobal? I think a bit of cynicism is needed for a healthy conversation. And "no" the recession is not over.

Posted by: Robert R | September 25, 2010 11:58 AM

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We're in a Depression, not a Recession. The difference between now and the 1930's is all of the
welfair, charities, and regulations that mask the reality of how bad it is. Of course if you just talk
with someone who is out of work, it's clear. Those who have had income cut dramatically, don't know what
to do, as they can lose a new job as soon as they get it, if they're lucky enough to get one. Those who are fat, dumb, and happy don't think it's all that bad.

Ask yourself what force is going to drive consumer
spending? Where's that money going to come from? When will credit be more easily available? Will we
all look for government jobs? I recently saw an insurance agent I know who took a waiter job for extra money. I never thought I'd see that!

Posted by: Tony V. | September 24, 2010 8:36 PM

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Oops... correction...

Since January 2009, the economy has lost 3.2 million jobs. They are hoping that by pronouncing it over, they can help prop up the illusion of recovery.

Posted by: Kevin D | September 24, 2010 2:04 PM

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Oh please. The "Great Recession" is nowhere near over, regardless of what the "experts" say. These are the same experts that are regularly surprised at the "unexpected" bad numbers for nearly every month over the last two years.

I'll consider the "Great Recession" over when unemployment is under 5% and over half a million jobs have been created.

Until then, its a fool's game to pretend otherwise.

Posted by: Kevin D | September 24, 2010 12:59 PM

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