IT Security Issues in Insurance

May 12, 2004

Abstract

New York, NY, USA May 12, 2004

Reports Published by Celent

US Insurers will spend an estimated US$618 million on security in 2004, rising to US$772 million by 2006.

Security is a top priority for insurance IT groups. The recent growth of privacy regulations along with the explosion of hacks, viruses, worms, and other threats that can compromise information, damage networks, and cripple business processes, have put the issue of security at the forefront. Security-related spending currently accounts for an estimated average of 3% of total IT budgets, or US$618 million. Celent estimates that this will grow to 3.4% or US$772 million by 2006.

While much has been written by specialists about IT security in general, there has been little written specifically from an insurance point of view. Celent’s new report , , is designed to familiarize insurance business and IT executives by providing an overview of some of the key issues and practices that fall under the general rubric of "IT security" for insurers. It provides insight into top concerns, activities, and priorities, as well as current and projected spending and staffing levels. The report is based primarily on an online survey of 19 insurance executives at top-tier carriers in the life and property/casualty sectors conducted in February and March of 2004.

"Security is top of mind for insurance IT groups ,"

says Matthew Josefowicz, Manager of Celent’s insurance group and author of the report. "But, encouragingly, most insurers seem to be taking a rational and strategic approach to the issue. Assessments of current vulnerabilities and overall strategy development were consistently cited by insurers as their highest priority security initiatives. This bodes well for the industry."

The report examines insurers’ organizational, staffing, and budgetary response to IT security threats, as well as greatest perceived risks, business drivers, current initiatives, and regulatory pressures. It concludes with five key recommendations for insurers.

The 21-page report contains 13 figures.  A Table of contents is available online.

of Celent Communications' Property/Casualty Insurance and Life/Health 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 May 12, 2004

Return to report Abstract

 

EXECUTIVE SUMMARY 3
INTRODUCTION 4
  Sources 4
ORGANIZATION, BUDGET, AND STAFFING 5
  The Buck Stops at The CIO's Desk 5
  Staff 6
  Budget 7
  Total Spending Estimates 8
  Working Across Departments 9
TOP CONCERNS 11
  General Concerns 11
  Agent e-Business Concerns 12
BUSINESS ISSUES AND IT SECURITY 14
  General Issues 14
  Compliance 15
  Security Concerns and Delayed Projects 16
TOP CURRENT INITIATIVES 17
CONCLUDING RECOMMENDATIONS 19
OBJECTIVITY & METHODOLOGY 20

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