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Today's CIOs stand at the intersection of business and technology.

Credibility comes from developing a good track record, says PWC's Adler. Clearly defining the business expectations for projects is the first step, Adler says. ""IT has problems when they believe they're successful but havenot, in fact, addressed what the business executives view as their goals and objectives."" CIOs should also work to create situations for short-term victories. ""IT executives need to think about how to achieve success in months rather than years,"" Adler says.

Insurance industry CIOs need to master an understanding of both the specific opportunities of the Web and the threats it presents by opening up novel avenues of competition, Adler says. But, he adds, the field includes more than Web-spawned competitors. ""It's a different marketplace than it was a year ago,"" he says. ""There are huge threats and opportunities, not just from insurers, but other financial institutions, from start-ups as well as other bricks-and-mortars that are not financial institutions at all—the GMs and GEs of the world.""

In order to compete with new-economy competitors, CIOs have to foster a dot-com mentality. ""It's really the only way to establish speed within a company to rival the advantages that a dot-com has,"" Adler says. ""When you're in the start-up mode you have the advantage of moving fast, making decisions quickly and being willing to take some risk."" Even large carriers can accomplish this, Adler says, ""without abandoning methodology and process to get to the end of the line successfully.""

At the same time, the CIO needs to develop a bridge back to the legacy environment. Thus, says Adler, ""they ultimately have the infrastructure and the architecture to connect the start-up e-business projects to what they've traditionally been doing over the years.""

As CIOs go forward with these initiatives, says PWC's Adler, ""focusing on the customer will be key—really trying to develop the appropriate architecture and solutions to acquire and retain customers."" He adds, ""Anyone that has a major role in technology these days has to be focusing their energies and investments here—if not, they're going to have a big issue.""

""They have to get a complete grasp around the customer,"" says David Hollander, partner, insurance industry, North America, Andersen Consulting (New York), adding that many carriers fail to capture the needed data. ""Getting that data and properly analyzing it is critical. All life and health companies are going to want to have different channels of distribution with self-servicing capabilities, including eCRM for the customers that are prone to buy online.""

Customer relation management is more than just a sales-related function, says Chuck Johnston, program director, insurance information strategies, META Group (Manchester, CT). ""Too many people think that CRM must be call center, front-end, it must be sales,"" Johnston says. ""But customer-centricity is central to the business we're in; it's not just a sales issue, it's part of the sales/service continuum."" Effective CIOs will manage their organizations so that any customer-facing initiative will align with the customers' behavior patterns, in a way that's consistent with how the organization does business with those customers, Johnston says.

CIOs on the property and casualty side should look to gain ground in claims processing. ""Wrong claims or overpayment eats up to 10 points of profitability,"" says Andersen's Hollander. There is room for greater efficiency in underwriting and processing, he adds. ""Carriers have not done a good job. They have very simplistic rules and...there is very little differentiation from the pricing and spacing. They need to be granular in the way they look at their risks,"" and look at smaller segments of profitability, he says. As the companies that understand this know, he adds, ""there is gold within niches.""

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

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