Insurance CIO/CTO Pressures, Priorities, Projects, and Plans in 2006: Survey Results

December 14, 2005

Abstract

New York, NY, USA December 14, 2005

Celent痴 third annual survey of senior IT executives reveals a positive IT outlook for 2006, modest budget increases, and renewed focus on enterprise data quality.

In the fall of 2005, Celent surveyed senior IT executives to identify trends in the priorities, behaviors, initiatives, and infrastructures at US insurers. According to the report summarizing the results, Insurance CIO/ CTO Pressures, Priorities, Projects, and Plans for 2006: Survey Results, there is more continuity with last year痴 results than differences. "In general, 2006 looks to be much like 2005. Insurers are focusing on growth, updating key core systems, embracing more flexible and affordable architectures and resource strategies, and doing it all under tight supervision from the business side," says Matthew Josefowicz, manager of Celent痴 insurance group and lead author of the report.

According to the report, a notable development is the increased awareness and focus on enterprise data initiatives, an area Celent has christened "data mastery." "Insurers are realizing that control over their data is the only way to ensure profitability, effectiveness, and compliance," says Josefowicz.

In contrast to last year痴 results, in which a clear majority of respondents had a negative view of the vendor marketplace, insurers are more inclined to believe an acceptable solution is available in the marketplace. Most large firms are still inclined to assemble best-of-breed components, while many smaller companies prefer end-to-end solutions.

Across the board, new project budgets continue to be focused on core systems, distribution/e-business, compliance/security, and data mastery initiatives. Other areas like e-signature, VoIP, and wireless are under active consideration by many insurers for 2006.

Use of IT outsourcing continues to be strong and growing, with the average large and midsize insurer spending 17% and 11%, respectively, of their IT budgets on outsourced services. This year also saw a continuation in the shift toward lower cost platforms, as insurers continue to migrate functionality off the mainframe and toward Windows and Linux. Use of SOA, Web services, and ACORD XML continues to be strong as well.

This year痴 survey also examined three new areas: business continuity planning (which shows an over-reliance on tape rather than faster recovery systems); compliance and security (which illustrated concern over privacy, viruses, and patch management, as well as, of course, Sarbanes-Oxley); and staffing and recruiting (which highlighted the challenge that location poses for many smaller firms).

The report was culled from 26 surveys from IT executives. Most respondents were CIO-level and all represented insurers with more than US$100 million in premiums.

The 52-page report contains 40 figures illustrating survey responses.

A table of contents and a list of figures is available online.

of Celent's Life/Health Insurance and Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

        

Send mail to info@celent.com with questions or comments about this Web site.

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 subsidiary 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

 

New York, NY, USA December 14,  2005

Insurance CIO/CTO Pressures, Priorities, Projects, and Plans in  2006: Survey Results

Return to report Abstract

 

Executive Summary 3
Introduction 4
Key Findings 6
About The Survey 8
Business Pressures and IT Priorities 10
Budgets 13
New Project Approvals 20
Specific Initiatives 23
Data as a Strategic Asset 28
IT Outsourcing 30
Platforms and Technologies 33
SOA, Web Services, and ACORD XML 37
Vendors: Preferences and Perceptions 39
Compliance and Security 42
Business Continuity Planning 44
Recruiting and Staffing 47
Conclusions 50
Objectivity and Methodology  51

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