It's the season for forecasts, resolutions and fresh starts, and the business media (including Insurance & Technology) has been offering lots of predictions about what will be hot (and not) in the coming year. In the interests of fair play/equal time, I'll offer a couple of predictions of my own. I'd like to think they are based on common sense and intelligent interpretation of the obvious, but we'll have to reconvene next December to see if that's really the case.
Expect more mergers. OK, you don't need to be a genius to see that one coming; in fact, I safely could have made that prediction every year that I've been in the industry. Last year ended with the announcement that global brokerage Aon would acquire solutions provider Valley Oak Systems, and I'm sure that between the time I write this editorial and when the issue goes into the mail there will be at least one prominent deal -- either a vendor/vendor or insurer/insurer merger -- to kick off 2007. In fact, according to a PricewaterhouseCoopers study, 2006 was shaping up to be a record year for M&As, with financial services, technology and telecommunications among the industries expected to experience even more merger activity in 2007. The drivers of these deals will be the same as ever: a quest for economies of scale, growth limitations, pressure from stockholders and management looking to cash out, just to name a few. You also can be sure that some of the people most affected by these mergers -- customers and the respective IT teams -- won't be consulted as the deals are finalized.
There will be management shakeups in the industry. Again, I won't claim seer-like powers to make that prediction. Another record was set in 2006, this one for CEO departures. According to outplacement firm Challenger, Gray & Christmas, a total of 1,347 chief executives at U.S. companies departed in the first 11 months of 2006, compared with the previous record of 1,322 CEO departures in all of 2005. This includes CEOs who left by choice, retired, were fired or died. Comparable numbers probably can be tallied for other C-level positions, from CIOs and CFOs to the newer chief risk officer and chief information security officer roles, since the windows to demonstrate success (in overseeing a merger, a legacy systems replacement or a reduction in fraud, for example) are becoming much smaller, the acceptable time frames to show results much shorter and the dollar amounts involved much bigger. Happy New Year!
Katherine Burger is Editorial Director of Bank Systems & Technology and Insurance & Technology, members of UBM TechWeb's InformationWeek Financial Services. She assumed leadership of Bank Systems & Technology in 2003 and of Insurance & Technology in 1991. In addition to ... View Full Bio