Newly released research by Giga Information Group, a wholly owned subsidiary of Forrester Research, Inc. (Nasdaq: FORR) reveals insurance CIOs¿ top business and IT issues in the industry.
According to the report ¿Improving Business and IT Efficiency Tops Priority List For North American Insurance Company CIOs,¿ while revenues and profits for the industry in North America are rising, the recent turbulence from stock market decline, bond defaults, and increased claims have left insurance companies uncertain about the future. As a result, most insurance companies surveyed in the report are looking to increase profits by improving efficiency among their own employees, in the agent channel (which still remains critical for insurance sales), and in their own use of technology.
¿The insurance company CIOs we talked with are primarily focused on incremental improvements, both to business operations — internally as well as with agents — and in their own IT activities and operations,¿ said Andrew Bartels, vice president at Forrester. ¿CIOs have gotten business support for increased IT spending focused on improving efficiency and increasing customer loyalty, but they are not pushing major new IT projects.¿
IT budgets in 2003 for North American carriers are up 2 percent on average — especially in software (5 percent), network equipment (3 percent), and salaries and benefits (3 percent). Spending on hardware and outsourced services is flat, and spending on consulting is down. Top areas of new spending are security, content and document management, and core transaction systems, followed by data warehouses, focused customer relationship management (CRM) projects, agent- and claims-related software, and business intelligence. While insurance companies are generally not adopting leading-edge technologies, such as Web services, or more mature technologies like portals or Linux, they are leading adopters of IT management best practices, such as enterprise architecture, business alignment techniques, IT vendor management, and standardized project management methods.
Insurance company CIOs can use these survey results (detailed in full in the report) to benchmark their organizations against industry peers. To keep up with competitors, insurance companies should be increasing their IT investments where it can help improve productivity and efficiency, both among employees and in the agent distribution channel. Companies that have lagged in adopting IT best practices should quickly do so, especially in areas like IT vendor management and IT/business alignment. Insurance companies should also be looking more aggressively at IT and/or business process outsourcing, CRM, and infrastructure upgrades.
Highlights Of The Report
For commentary by Andrew Bartels or for a copy of the full report with detailed charts and graphs, email firstname.lastname@example.org.
The research mentioned in this press release is available to Giga Advisory clients and can be found through www.gigaweb.com.