March 20, 2012 – Singing a new tune compared to past years, insurance CIOs are optimistic about IT’s role in the business. Celent’s latest report, “2012 US Insurance CIO Survey: Pressures, Priorities – and Innovation,” indicates that half of the survey respondents are projecting revenue growth of 4 percent or more and almost all of the others estimated moderate growth of 1 to 3 percent.
Also, the business is asking IT to play a greater role in growth and profitability. The CIOs responding to the research firm’s survey contend that to do so, they are accelerating core system and back-office systems initiatives, namely policy admin and claims systems projects. However, the survey points out, new business/underwriting is becoming more of a focus. “This emphasis reinforces what Celent has heard in other conversations with CIOs and vendors regarding an increasing level of interest in portals, new business and underwriting solutions,” the report states.
This focus also supports the 2012 growth imperative that CIOs are hearing from corporate leaders, said Donald Light, senior analyst at Celent and co-author of the report. “New business technology usually involves portals and/or STP/automation)," he tells INN. "Underwriting is a solution category with a limited number of standalone vendor-supplied solutions – so we are also seeing interest in internal builds."
While this is a focus, a majority of CIOs recognize innovation is of importance and try to balance it with operational excellence. About a fifth of respondents describe innovation as central to their corporate strategy.
To be innovative though, insurers need the tools, processes, organization and incentives in place, and there are many CIOs who report that they have emerging technologies in place to some degree. But, Celent projects this will improve in years to come. Looking ahead to 2015, the most significant growth will be in mobility apps for customers and the use of social media for underwriting, internal groups and claims, according to the report.
All of this activity poses many challenges for insurance CIOs. Respondents identified the most difficult aspects of their jobs, which all fell into three groups: delivering on current and planned projects, utilizing available resources to meet strategic technology goals and pushing boundaries with innovation.
Overall, the outlook for technology spending for most, but not all, insurers is positive, Celent says. The analyst and consulting firm says CIOs will need to “manage the modestly increased level of resources to optimize time to value, and to use both current and emerging technologies to support business innovation.”
This story originally appeared at Insurance Networking News.
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