While a down economy is causing organizations in many sectors to cut their information technology spending, insurance companies are going against the grain by increasing their investments in customer relationship management, says Meridien Research Inc., a Newton, Massachusetts-based analysis firm.

Global spending on insurance-related CRM projects will total $1.6 billion by year end, up slightly from 2001, Meridien says. But spending is projected to increase 8 percent compounded annually over the next several years, reaching $2.5 billion in 2006.

Companies are using CRM tools to improve customer service to policyholders in an effort to increase loyalty and retention, Meridian notes. Large organizations with CRM projects include Blue Cross/Blue Shield of Massachusetts and MetLife, the firm adds.

"Insurance companies that 'get CRM' are continuing to invest in initiatives that streamline operations and improve customer service to policyholders," says Stephen Ross, Meridien analyst. "Insurance companies that differentiate the customer's total experience throughout the entire life cycle will win."

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