Mood Swing

Insurance technology executives aren't exactly singing 'Happy Days Are Here Again,' but they are increasingly optimistic about the business technology outlook, InformationWeek Research reveals.

Prepare for the Worst

But, if where IT spending is being focused is any indication, it's not a totally rosy scenario for insurance technology executives in terms of how they are viewing the business environment. InformationWeek Research found that the top business priorities for IT implementation or support this year will be security and business continuity, closely followed by IT support of regulatory compliance (see chart, bottom right). It's not that the industry isn't already aware of these imperatives, relates TowerGroup's Smallwood. "This has always been a priority," she says, noting that TowerGroup's own research shows there was a 12 percent increase in security-related spending across all financial services from 2003 to 2004.

"What we're seeing is an upswing in insurance and financial services to bring business continuity to the next level of maturity, what we call operational resilience," a more "holistic approach" to business continuity that balances the goals of uninterrupted service with a recognition that nothing can be "100 percent foolproof," she explains. "Companies need to determine what level is acceptable. We're talking about taking all the Y2K business continuity planning we did and taking it to the next level of maturity."

Similarly, the Priorities Study indicates that specific technology projects in the works will be heavily focused on security areas, such as network security, intrusion detection and content filtering/anti-spam software (see chart at left).

Another area of focus for insurance IT, according to the InformationWeek Research study, will be organizing and utilizing customer data. According to TowerGroup's Smallwood, some of this will be directed toward "the whole area of underwriting and ways to write more profitable business," especially in the P&C segment. This involves systems that enable insurers to bring in "external data, better ways to price and do risk analysis, straight-through processing, automating the agent, and creating underwriting workstations," she says. "The technology is available and there are some great products out there."

For more information about the InformationWeek Research Priorities Study and Confidence Index, visit www.informationweek.com/benchmark/ITconfidence. Helen D'Antoni produced this research.

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

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