New Realities, New Requirements

As our companies cope with significant environmental shifts in our markets and business operations, insurance industry technologists face rapidly accelerating changes in 2005.

Consider some of our new world realities. Consumers face a shifting burden, one that requires them to accept greater individual responsibility for their financial security than ever before. To wit, many employers are shifting greater responsibility for healthcare, retirement and personal protection to their associates. With an eye towards life spans now creeping into the 90s, those people already in retirement are shifting assets into lifetime income streams. And governments, where possible, are shifting more of the costs for public programs to the private sector.

As technology leaders, we face our own operating realities. In the last few years, we've cut our teeth on new issues, including privacy, disclosure, security and suitability. And there are the realities of insurance -- products that live for decades, customer relationships that span generations, diverse distribution systems, and continually evolving views on capital adequacy and operating risk. Globalization further adds to the complexity.

Successful insurance technologists will accept and address environmental shifts while building foundations for the future. To do this, we must be intimate with our markets and actively help shape our regulatory environment. Building for the future also requires a staged execution strategy that both moves industry capabilities forward and, at the same time, reduces cost and complexity.

Looking ahead, we're likely to see an increased emphasis on touch-point technologies with systems built around data, not paper. New technologies certainly will play a bigger role -- automated decision engines will be key to underwriting and claims processes; stochastic modeling and simulation technologies will support new product development and liability, and asset management; and business simulation technology will help design for success in our accelerating environment.

As the environment continues its rapid shift, CIOs must be catalysts for creating a new insurance experience, one that delivers great service, cost effectiveness and process integrity. Importantly, this experience should be created through the innovative use of new technology in tandem with respect for, not fear of, our legacy technologies.