Result of Live Budget, Strategies Poll from I&T Summit
In the weeks leading up to the I&T Executive Summit, we ran a survey with four quick, multiple-choice questions about the state of IT budgets, strategy, and staffing at insurance companies. Tuesday, at the Summit, we asked attendees the same four questions, comparing and contrasting the results.
PRE-SUMMIT POLL:
- Greater than the 2011 IT budget by 1-3%: 31.4%
- Greater than the 2011 IT budget by more than 3%: 22.9%
- Flat/even with the 2011 IT budget (no change): 22.9%
- Smaller than the 2011 IT budget by 1-3%: 8.6% 3
- Smaller than the 2011 IT budget by more than 3%: 14.3%
It was not surprising to see that most companies plan to increase their budgets especially in light of the following question about top priorities. With many carriers in the midst of expensive core systems revamps, more IT budget is practically a fait accompli.
PRE-SUMMIT POLL:
- Policy Administration: 37.1%
- Claims: 11.4%
- Regulatory Compliance/Financial Systems: 2.9%
- Risk Management/Security: 2.9%
- Distribution: 0.0%
- Customer Experience/Channel Optimization: 22.9%
- Data Management (underwriting, analytics, business intelligence, storage, etc.): 17.1%
- Other: 5.7%
As noted above, policy admin dominates as top strategy for many carriers, with claims and customer experience following quickly. This likely demonstrates a commitment on the part of insurers to increasing customer retention: By modernizing their systems, they can bring new products to market quicker, to serve emerging customer needs; as well as make their service organizations more efficient.
To me, this was magnified in advance of the summit due to the "big doughnut" next to distribution in the pre-poll. A lack of investment in distribution could show a focus on retention rather than acquisition. Presenting the research with us, SMA's Deb Smallwood put forth a couple other reasons that this might be, however. First, the agency/web portal market is mature and many carriers may be in a good place with their distribution technologies. Second, those are simply not as expensive as some of the big-bang projects, so while they may be underway, they can't be truthfully called "the top area of IT investment." Lastly, some insurers might see bleeding betweeb distribution and channel optimization. Distribution initiatives, however, were reported as top-of-mind for a few respondents in the live poll.
PRE-SUMMIT POLL:
- Limited budgets/resources: 28.6%
- Consumerization of technology: 8.6%
- Compliance-related projects: 8.6%
- Legacy systems: 34.3%
- Workforce skills shortages in key competitive areas such as analytics, social media, etc.: 8.6%
- Enabling appropriate security for emerging channels such as mobile, digital, etc.: 8.6%
- Other: 2.9%
The big question after the Summit poll was this: How can budgets be going up, but still tied for first with legacy systems as the top challenge for insurers (and in a close second in the pre-poll)? If you're in a position where your budget is going up, yet you still find meeting it challenging, feel free to drop an e-mail or leave a comment. Is the problem stinginess on the business side or cost overruns in major projects?
PRE-SUMMIT POLL:
- Increasing: 25.7%
- Decreasing: 14.3%
- Maintaining: 60%
Far more respondents were maintaining staffs in the pre-poll than the live poll, where it was reported that many insurance IT staffs will increase next year. It's possible that there was some selection bias at work, as the attendees of a Summit titled "Driving Growth, Optimizing Resources" might be more inclined to come from organizations that are planning big leaps in the next year.
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio
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