International Insurance IT Executives Continue To Invest, Priorities Vary
While the world holds its breath to see if the global economies are experiencing a light cold or full-blown pneumonia, insurance CIOs in markets outside the United States have plenty of technology initiatives to pursue. Of course, global CIOs face the unique challenges of their local markets and economies.
European insurance IT executives, for example, will focus on streamlining operations and improving distribution. Meanwhile, their Asian counterparts will look at scaling for growth and product innovation, and Latin American insurance CIOs will continue along the lines of industrializing their businesses. While international insurance CIOs will keep a watchful eye on the global stage, they will continue to invest in strategic technology initiatives in 2008.
Europe: Getting the House in Order
There is much talk of a global recession, triggered in part by the subprime crisis in the United States, and the full impact on European insurers remains unclear. But the compelling reasons to tackle legacy systems and improve the overall interaction experience of customers and brokers remain in place. Senior management in insurance companies have seen enough examples of the value delivered by technology innovation to keep the spending spigot turned on. However, they also will keep more of an eye turned to the general economy as 2008 unfolds. Until the dust settles on this storm, Celent expects European insurers to continue along the investment lines of their 2008 budgets.
In Celent's annual European CIO survey, insurers noted an overwhelming focus on two key areas. The first priority is on internal operations. Insurers are keen to streamline business processes, remove duplication of effort and automate where appropriate. 2008 will be about getting the house in order. IT investment to support this objective will be around core systems, business process management tools and improved infrastructure. Legacy systems remain a stumbling block for the streamlined organization. Poorly documented code, inflexible data models and high maintenance costs all make it difficult for IT to support the business.
Improving ease of doing business and speeding time to market also remain near the top of European insurers' priority lists. With increased competition for new business, insurers are investing around distribution capabilities and improving the integration with the back office. Investment is planned around new-business solutions, such as broker portals; upgrading core systems; and in Web services and SOA to improve integration efforts.