A Future of Risk and Reward
The future of an industry's technology organizations is shaped largely by what has been found to work among strategies and solutions tested against the challenges of the present. In that respect, 2005 was a year of steady progress in insurance. The experiences of technology executives during the past year reinforced lessons learned in areas such as e-business and agent-interface technology; provided encouragement about more-uncertain types of investment, such as service-oriented architecture (SOA) initiatives; and showed the inevitability of certain technology trends, such as the convergence of telephony and data networks.
But 2005 also is likely to shape the future through events that weren't part of the plan. Regulatory compliance and related concerns were very much on the minds of CIOs and their C-level colleagues, but the ouster of AIG's Hank Greenberg came as a shock - and a warning - to many. 2005 also reinforced the reality of man-made catastrophes with the terrorist attacks in London and Madrid. And 2005 beat the odds by serving up an even more brutal hurricane season than the record term of 2004, with all that that means for claims, and CAT and risk management technology.
In the face of such risks, technology executives can take encouragement, and pride, knowing that as much as outside forces and corporate exigencies shape technology decisions, insurance technology has greater power than ever to shape corporate responses. Few solutions to insurance enterprise problems lack an IT component, and as technologies mature, that component only has grown larger. The world seems to grow riskier by the year, but the insurance enterprise, when astutely managed, thrives on risk.
Technology investment itself is a risky proposition, but disciplined companies have made it less so through improved governance, project management and process improvements; mastery of developing technologies; and intelligent, cost-effective application of those technologies to business problems. The rewards of their discipline have begun to show in outcomes such as fewer costly failures, higher ratios of development to maintenance, greater speed to market, better service to distributors and policyholders, more-efficient operation, and greater market agility. These gains, in turn, are fostering growth, customer retention, underwriting profit, and improved risk and financial management.
Of course, in a competitive world, the work never is done. In the pages that follow, Insurance & Technology presents a look at insurers' strategies, industry issues and experts' recommendations to address risks and maximize rewards during the coming year.
Our 2006 Business Technology Forecast begins with a look forward through the eyes of members of I&T's Reader Advisory Board, including Bruce Goodman, senior vice president and chief service and information officer, Humana. "If there is a single technology that might be dominant in 2006, I believe it is one that improves security and remote access for mobile users," he predicts. "Our industry will likely see a continued increase in use of the BlackBerry and similar wireless handheld devices, work-at-home employees and global sourcing - this trend cries out for improvements in technology that will provide secure access to data from anywhere at any time." The forecast continues with analysis of the technologies that are transforming insurance as well as a review of the regulatory issues facing the life, health and P&C industries, and concludes with an analyst's perspective on the challenges and opportunities of the new year.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio