Top 10 Trends in L/H Insurance E-Business Today and Tomorrow

September 7, 2004


New York, NY, USA September 7, 2004

Top 10 Trends in Insurance E-Business Today and Tomorrow

Celent predicts that total insurance IT spending devoted to e-business is about US$1.6 billion today and will grow cautiously at about 5 percent per year over the next two years.

Celent痴 new reports, Top 10 Trends in P/C Insurance E-Business Today and Tomorrow and Top 10 Trends in L/H E-Business Today and Tomorrow, present 10 key trends in each sector of the insurance industry. These trends have been observed by Celent over the course of its ongoing research and supported by data from its recent online survey of more than 65 insurance executives.

"In 2001, when Celent first examined the role of the Internet in the insurance industry, fewer than half of US insurers had any significant e-business systems,"

said Matthew Josefowicz, manager of Celent痴 insurance group and author of the reports. "But over the past three years, the Internet has become so integral to the way insurers conduct business that it is starting to fade as a distinct category and merge into the overall IT environment as a general enabling technology."

The trends presented in the reports are:

Property/Casualty Life/Health
1. E-business accounts for 5 to 15 percent of P/C IT spending. 2. Most e-business systems are homegrown or built from components, not software packages. 3. P/C e-business means agent e-business. 4. Insurers look to agent e-business to differentiate themselves from close competitors. 5. Most agents, especially high-value ones, are active portal users. 6. The value of agent e-business is in speed and cost savings. 7. Policyholder portals are for parity, not advantage. 8. Policyholder portal use is limited, but growing. 9. Policyholder portals are for reputation and retention, even more than cost savings. 10. Investment in e-business for prospects is minimal. 1. E-business accounts for 3 to 15 percent of IT spending. 2. Most e-business systems are homegrown, not software packages. 3. E-business is tilted toward agents, but policyholder portals are important and growing. 4. Agent portal use is strong and creating value. 5. Portal-using agents are higher-value agents. 6. Agent e-business is about cost savings and service levels. 7. Policyholder portals are a source of competitive advantage. 8. Policyholder portal use is limited, but growing, especially among higher-value customers. 9. Policyholder portals deliver cost savings as well as improved brand and service. 10. Investment in e-business for prospects is minimal.

Total insurance IT spending devoted to e-business is estimated at about US$1.6 billion today and will likely grow 5 percent yearly for the next two years. In both sectors, most IT budgets are devoted to agent/ distributor systems, but life/health insurers devote almost double the amount to policyholder portals that property/casualty insurers do. This reflects the greater strategic value of policyholder portals in life/health, where they are more widely viewed as a potential competitive advantage rather than as a parity play.

Each report also contains 10 predictions for e-business over the next two to three years, and closes with several key strategic points for both insurers and for technology providers.

Each report is more than 35 pages long and contains over 25 figures. A table of contents for the property/ casualty volume is available here, and one for the life/health volume available here.

of Celent Communications' 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 for more information.

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

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Michele Pace
Tel: +1 212 345 1366

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Chris Williams
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
Tel.: +81 3 3500 3023

Table of Contents


New York, NY, USA September 7, 2004

Top 10 Trends in L/H Insurance

Return to report Abstract


  1. E-Business Accounts for 3 to 15 Percent of L/H IT Spending 10
  2. Most E-Business Systems are Homegrown, Not Software Packages 11
  3. E-Business is Tilted Toward Agents, but Policyholder Portals are Important and Growing 12
  4. Agent Portal use is Strong and Creating Value 15
  5. Portal-Using Agents are Higher-Value Agents 18
  6. Agent E-Business is About Cost Savings and Service Levels 20
  7. Policyholder Portals are a Source of Competitive Advantage 23
  8. Policyholder Portal Use is Limited, But Growing, Especially Among Higher-Value Customers 25
  9. Policyholder Portals Deliver Cost Savings as Well as Improved Brand and Service 27
  10. Investment in E-Business for Prospects is Minimal, and Impact has Been Limited 31

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