Insurance Industry Looking to Meet Technology Challenges

By | May 21, 2002

Orlando – Issues surround every business across the U.S. and the world for that matter. But what strategic issues are facing the insurance industry in 2002? Panelists, with sometimes varying points of view, tried to address that May 19 during the opening day of the 2002 Acord Conference “Real World Solutions.”

At a town meeting here in Central Florida, Todd Eyler (Forrester), Denise Garth (ACORD), Kim Harris (Gartner) and Jack Tyniec (TCi), all appeared in agreement that P/C insurers have some ground to make up in implementing XML.

According to Gartner research, XML is still in its early stages. 78 percent of P/C insurers have not implemented it, yet 78 percent of those same industry personnel say XML will be adopted industry-wide in the not too distant future.

“There are four key areas that are driving the change,” Garth, ACORD’s vice president of membership management, commented.

“Customers, competition, globalization/business environment, and technology. Unfortunately, insurance business models lack the following: partnerships; outsourcing; new methods of sales, service and distribution; and limited time available to complete.” Garth said the major question out there is, “Do you understand your customers and what they want?”

Harris, a research director, remarked that while we’ve gotten past the hype of XML, many people still wonder what it is going to give them. “A lot of insurance people are saying that when there is industry-wide acceptance, they’ll join.”

Eyler, a senior analyst, said despite what some surveys indicate, the insurance industry has made strides and even been ahead of the retail and financial services markets.

“The challenge is to create standards and think about what you’re good at. I think CEO’s with tech perspectives will drive much of that change.”

Tyniec echoed that sentiment, noting that “we’re going to see more individuals coming from outside the insurance industry, those young people who have grown up with more of a technology background when they come in the door.”

Eyler, cautioned however, that those entering the door who have a great technology background, still need to understand the complexities of the industry. Tyniec agreed, adding “the industry is extremely complex.”

How much are insurers investing in the new technology?

Harris said that one challenge for I.T. leaders is just how much time and effort they have available to manage the technology. “What I hear is that every day is tactical survival and that leaves little time to manage these other areas.”

Tyniec said that the income devoted to technology is still “an investment we lack. You need to be aware of the technology out there and how it will help. Insurers need to detail the business value of XML.”

Topics Tech Market

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