If a recent survey by the Financial Services Forum of its membership is any indication, financial services CEOs are generally pessimistic about the prospects for the U.S. economy overall and for financial institutions in particular. According to the Washington, D.C.-based financial and economic policy organization's Spring 2008 CEO Survey, the industry faces many obstacles to growth, including continued turmoil in the credit and housing markets, rising protectionist sentiment, and higher tax rates. With no quick end to the global credit crisis in sight, nearly 90 percent of the financial services CEOs who responded to the survey said they believe the U.S. economy is heading for recession.
Not surprisingly, CEOs identified the "free flow of capital" -- the flip side of the credit crisis -- as the key factor driving growth; it has increased in importance since the previous Financial Services Forum survey in October 2007. "Technological innovation" was identified as the second-most important factor driving financial services growth, and that also has grown in importance since the October survey.
Not only do the five executives profiled in this issue of Insurance & Technology -- our latest exemplars of "Tech-Savvy CEOs" in the insurance industry (see page 20) -- understand and embrace the concept of technological innovation as a growth driver in their businesses, but I would also wager they'd tend to take a more optimistic view of the future. That's because they -- and their organizations -- have flourished by bucking conventional wisdom about how insurance companies should operate, invest in technology, and deal with policyholders and employees.
It's not that these chief executives are irresponsible risk-takers -- far from it. But they understand that when change and innovation are introduced into a strong culture -- where open communications across lines of business and all functional levels are the norm, and where IT and the lines of business are partners rather than antagonists -- the odds of success increase dramatically. Because of sound financial performance and, yes, technological foundations, these CEOs can be intelligently opportunistic, responding to market changes in ways that organizations with less visionary leadership can't even begin to attempt.
With tough times ahead, many carriers will have no choice but to put strategic initiatives in holding patterns, or worse. Here's to the CEOs who can lead their companies forward despite the challenges.
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