I don't own Netflix stock, but I love the company (if my 10-year-old self had on-demand access to every Star Trek: The Next Generation, I might never have left the house). So it's painful to see what's happening to it today. The clumsiness of its message about rate increases — completely justifiable if you look at the media landscape and see what's driving costs — caused it to lose 800,000 subscribers and its stock price is falling fast.
What does this have to do with insurance IT budgets? Well, if Netflix had any big innovation plans, they might be on hold for the time being, as it's lost almost $10 billion in market capitalization and the company is in a bit of an existential crisis. That's not happening to any insurance companies right now (at least, not that I've seen publicly), but the point is this: In a lackadaisical economic environment, companies' fortunes can change quickly, and money allocated to different business segments — including IT — can evaporate in the name of saving the bottom line, very late in the budgeting process.
At the same time, IT should be making the case that continued investment in technology is a way for companies to differentiate themselves and stay ahead of competitors while all struggle with a soft market.
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Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio