Asia Insurance The Year Ahead: The CIO Perspective

by KyongSun Kong,  Wenli Yuan, June 17, 2010
Operations/ Benchmarking
Asia-Pacific

Abstract

Asia’s insurance business has been largely unaffected by the financial crisis compared to the other parts of the world. A recent Celent survey of insurance CIOs throughout Asia shows that 44% of Asian insurers have not significantly changed their business strategy, budget/IT spending, and product/distribution channels, although growth in certain lines has been negatively impacted.

In a new report, Asia Insurance—The Year Ahead: The CIO Perspective, Celent discusses business themes in the Asian insurance market, including business growth, cost reduction, ease of doing business, meeting regulation requirements, time to market, and related IT initiatives based on a survey of Asian insurance CIOs.

“Despite the financial crisis, Asian insurers’ IT budgets are holding steady. Over 85% of the survey participants increased or allocated the same budget for 2010 as 2009,” says Wenli Yuan, Senior Analyst with Celent’s Asian Financial Services Group and coauthor of the report. “Underwriting/policy administration, customer service representative portal/desktop, and agent portals are the top three focus areas for increased technology investment.”

“In Japan, software developed in-house is still the rule rather than the exception in the insurance industry,” adds KyongSun Kong, Analyst with Celent’s Asian Financial Services Group and coauthor of the report. “However, in the next few years, a surge is expected in the number of insurance companies considering the introduction of external software.”

This report discusses Asia insurers’ IT budgets, areas of increased investment, and IT initiatives around underwriting/policy administration systems, distribution, and claims. The report also examines Asian insurers’ enterprise IT strategy, specifically looking at IT structure, architecture, IT outsourcing, and emerging technology, such as AJAX, social networking, cloud computing, and SaaS.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned operating unit of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

5

Business Trends

6

 

Competitive Landscape

7

 

Product Trends

8

 

Distribution Trends

9

 

Regulation / Risk Management Trends

9

Business Themes for Asian Insurers

11

 

Reflecting on the Recession

11

 

Business Themes and Related IT Initiatives

12

 

Theme 1: Growing the Business

14

 

Theme 2: Cost Reduction

16

 

Theme 3: Ease of Doing Business

18

 

Theme 4: Meeting Regulation Requirements

19

IT Budgets Hold Steady

20

 

Areas of Increased Investment

22

 

Underwriting / Policy Admin

22

 

Distribution

24

 

Claims

25

Enterprise IT Strategy

27

 

IT Structure

27

 

Architecture Strategy

27

 

Views on IT Outsourcing

29

 

Views on Emerging Technology

32

 

The Impact of Regulation

33

Final Thoughts

34

Leveraging Celent’s Expertise

35

 

Support for Financial Institutions

35

 

Support for Vendors

35

Related Celent Research

36

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