"Insurers Say Risk Mitigation is Top Driver in Technology Investment." That's the conclusion Strategy Meets Action and Wolters Kluwer Financial Services drew from their joint IT Innovation & Compliance survey.
More than 60 percent of the survey’s 340 respondents, who included business, information technology and compliance executives at insurance carriers, said “reducing risk” within their organizations is one of the key business drivers triggering technology investments to improve compliance, according to a statement from the companies.
However, Novarica's US Insurers IT Budgets and Projects for 2011 survey paints a different picture. According to that firm, "reduced operational risk" is one of the lowest priorities for insurers of all sizes in terms of where they plan on investing their tech dollars next year.
Broadly, carriers next year will focus on policy administration replacement of some form, Novarica finds. (Note: Insurance & Technology's next digital issue will focus on why insurers are making these PAS system replacements and upgrades now — look for that in your e-mail boxes or on our site around January 10.)
Why the competing views? Well, SMA and Wolters Kluwer focused on compliance IT spending specifically. This is a sometimes-overlooked sector of the IT budget, Karen Furtado, partner, Strategy Meets Action, contends. As the regulatory environment becomes more complex, carriers need to make the investments necessary to cut back on, for example, the need to track rate and form changes manually.
“If carriers want to see an improvement in efficiency, risk mitigation and the overall application of technology, compliance executives must become more involved in the organization’s overall IT direction and decisions,” she says in a statement.
Meanwhile, Novarica expects a focus on IT delivering needed business capabilities above all else to rule the day going into 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