IT Governance in Insurers: One Size Does Not Fit All

by Catherine Stagg-Macey,  Jamie Macgregor, June 8, 2015
Operations/ Benchmarking
Global

Abstract

Insurers make a significant annual investment in IT. Managing how these decisions are made and how IT investment aligns with business outcomes is critical. Celent set out to determine the latest themes in the area of IT governance, with a focus on large multinationals, where this can be challenging.

In the report IT Governance in Insurance, Celent conducted interviews with senior staff at five of the ten largest multinational insurers. These interviews were augmented with conversations and experience Celent has had in this field.

The report looks to challenge the prevailing assumption that there is a “right” IT governance framework that can be replicated in different insurers. The report returns to the building blocks of IT governance and sets out the case for a clear link to business strategy.

“It is still clear that people think IT governance is done in the basement by some IT geeks, and it couldn’t be further from the truth,” says Catherine Stagg-Macey, an executive advisor with Celent’s Insurance practice and author of the report. “Good IT governance is a living and breathing manifestation of the business manifesto.”

The report includes a discussion on why IT governance matters, and the key elements of IT governance. It reports on the key themes in multinationals, discusses six factors in good IT governance, and closes with thoughts on where insurers should be placing their attention.

This 26-page report contains seven figures.

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

1

 

Key Research Questions

1

Introduction

3

 

Key Research Questions

3

 

What This Report Includes

3

The Value of IT Governance

4

 

What Is IT Governance About?

4

 

Why IT Governance Matters

5

The Elements of IT Governance

7

 

IT Remit

7

 

Domains

8

 

Styles

8

 

Mechanisms

9

 

Bringing It All Together

9

IT Governance at Large Multinational Insurers

10

 

Themes

10

 

Governance Styles

11

Six Factors Supporting Good IT Governance

13

 

Alignment to a Business Strategy

13

 

Clear Business Objectives for IT Investments

13

 

Awareness and Understanding of the IT Governance Model

13

 

Executive Participation

13

 

Balancing IT Supply and Demand

14

 

An Exception Process

14

Where Should Insurers Put Their Attention?

16

 

Know the Current Reality

16

 

Reflect and Learn

16

 

Final Key Considerations

17

Final Thoughts, With One Eye on the Future

19

 

And Finally …

19

Leveraging Celent’s Expertise

20

 

Support for Financial Institutions

20

 

Support for Vendors

20

Related Celent Research

21

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