Archives for November 2009
I recently spent several days with 60 or so insurance CIOs at a conference. Some observations from that experience that I think are worth sharing:
Most CIOs are excellent, professional data gatherers. They used both formal meetings and informal conversations to gather intelligence and to share their stories, with the implied understanding that a healthy exchange of ideas could help them do their jobs better.
Some problems that CIOs face are nearly universal, despite differences by company size, culture, and line of business distinctions. On the agenda for 2010 and beyond: attracting and retaining skilled workers, improving the relationships between business and IT, solving today’s problems with an eye on tomorrow’s technology; and managing complex portfolios of IT projects so that resources used and the business benefits gained are both optimized.
The business of IT doesn’t take place in a vacuum. Business concerns, legal and legislative issues, and universal human foibles always intrude. That’s why CIOs have to wear so many hats in their day-to-day roles. Depending on the hour, CIOs must think and act like strategy consultants, educators, law enforcement, psychologists, arbitrators, firefighters, and techno-geeks. If that all sounds a bit much, I would point out that’s what many CIOs appear to like about their jobs. There’s never a dull moment.
In an industry where consensus is often hard to find, most CIOs seem to think that technology is in a relatively good place right now. Industry trends toward SOA, SaaS, alternative sourcing strategies, plummeting costs of storage, and the improved quality of many packaged solutions may finally give CIOs the game-changing tools they need to help their companies thrive.
Celent’s upcoming 2010 insurance CIO/CTO survey report will explore these and other topics, and I can’t wait to see how the data compare to the anecdotal evidence I gathered at the conference.
We will soon publish our third report is a series that has been tracking insurer responses to the crisis. This report focuses on changes between responses in quarter two and quarter three of 2009. It is based on a Celent survey that examines how insurers are responding to changing market conditions and their expectations about the impact of the crisis.
The global financial crisis continues to have a significant impact on insurers. Since the fall of 2008, insurers across the globe have been keeping a close eye on economic indicators, their investment portfolios, their sales results, and potential regulatory changes. Some insurers have made changes to their business or IT strategies, while others have essentially stood still. But serious questions loom. How long will the economic recovery take?
What is clear from the data is that insurers have broadly made the hard and difficult decisions. Businesses have been sold, staff made redundant and strategies have been changed. IT has made it’s own hard decisions with similar changes in staff, heavy re-negotiations with suppliers, and broad changes in project portfolios. With the actions from difficult decisions underway or completed, insurers are also undertaking some aggressive options such as launching new products or new channels.
As the year progresses, insurers are becoming increasingly optimistic about the next quarter, and also the view a year out. They remain bullish about their own company’s strategies, including competing effectively and job security.
IT investment projects have been impacted through 2009, but the impact seems to be lessening. Cuts and reprioritisation has been made, and now the focus in back on delivery. Since last year, areas attracting increased investment include claims, infrastructure and data mining. Much of this investment is driven by cost reduction and regulation. Strong interest in data mining is particularly related to the financial crisis, increased regulatory scrutiny as a result, and impending Solvency II. Policy administration system replacement continues, with over half of the respondents having this on their action list. Investment in new business/underwriting has shifted to the low category in the last year.
As the year draws to a close, and new budgets and plans are revised for 2010, it’s clear there is much work to be done in IT department. It’s time to re-focus and get on with the job.