From year to year the demands faced by senior insurance technology executives tend to evolve: Fads come and go, but the predominance of newer technologies over legacy systems manifests itself more or less gradually, showing up in changed emphasis on certain types of initiatives. As insurers respond to a business landscape suddenly altered by the financial crisis, however, the coming year will represent a departure from this pattern.
While the crisis began in the banking industry, the failure of AIG implicated the insurance industry in the eyes of the public, and subsequent devastating losses in the equity markets have hit many insurers hard with regard to their investment revenues. To the extent that the national and global economic picture worsens, insurers also face the possibility of declining premium income, as consumers cut back on insurance coverage and income products.
But the crisis will also create opportunities. Insurers will be opportunistic as they seek to continue transformation efforts and capitalize on the market opportunities created by the troubles of AIG and other insurers ravaged by the crisis. Insurance technology organizations will likely curtail many "nice to have" initiatives, but they will move with greater focus on core initiatives and customer-facing capabilities, and they will drive forward with increasing urgency neglected areas that were exposed by the crisis, such as risk modeling and enterprise risk management.
In this 2009 Insurance Technology Outlook, I&T's editors and an array of leading industry commentators explore how the challenges and opportunities created by the financial crisis will affect insurers' technology strategies. Among the topics examined are the effects of the crisis on budgets and spending; the likelihood of new regulatory demands; intensified demand to advance technology capabilities for risk management, regulatory compliance and organizational transparency; the need to support M&A activity; and the challenge of advancing critical work in progress to replace legacy systems, deploy analytical capabilities, and improve service for consumers and distributors.
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