Escaping the Annus Horribilis: Insurer Views on IT and Business Strategies Moving Forward

by Catherine Stagg-Macey,  Craig Weber, January 25, 2010
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

For insurers, 2010 should be a year of “getting back to business.” Insurers will be actively preparing for a flurry of investments, with an eye toward meeting future challenges.

In a new report, Escaping the Annus Horribilis: Insurer Views on IT and Business Strategies Moving Forward, Celent looks back on 2009 and reviews how insurers’ attitudes and behaviours changed over the four quarters. The report is based on a Celent survey that examined how insurers are responding to changing market conditions and their expectations about the impact of the crisis.

As the depth of the recession became clearer as the year unfolded, so did the severity of the insurers’ responses. “In Q1 2009, most respondents thought changing strategies and large-scale staff reductions were unlikely,” says Catherine Stagg-Macey, Senior Analyst with Celent’s Insurance group and coauthor of the report. “But when the severity of the crisis set in, many companies had to make hard decisions. Now on reflection, and with some better insight as to where we are in the economic recovery, it is apparent that most companies bit the bullet and made the hard decisions mid-year.”


“If there is a single lesson for insurers from 2009, it’s the importance of an agile and flexible IT operation that supports rapid response to unpredictable operating conditions,” says Craig Weber, Senior Vice President of Celent’s Insurance group and coauthor of the report. “The legacy drag effect was felt by many, and this undoubtedly helped support renewed vigor in IT investment programs.”

In addition to looking at insurer views on the current quarter and a year out along several categories, such as job security, the report looks in some detail at the investment hotspots for 2010 and IT budgets. The report is the final in a series of four tracking perceptions during 2009.

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

4

 

Methodology

4

 

About the Respondents

5

Quarterly Comparison: 1Q2009 Vs. 4Q2009

7

Assessing the Industry Mood

8

 

The Trend in 2009

9

 

The View Inward

9

Responding in a Crisis

11

 

Measuring Company Resilience

12

The IT Response

14

 

IT Budgets for 2010

15

 

Structural Changes to IT

16

IT Investment Priorities

18

 

IT Budgets for 2010

19

 

Structural Changes to IT

20

Conclusion

21

Leveraging Celent’s Expertise

22

 

Support for Carriers

22

 

Support for Vendors

22

Related Celent Research

23

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