Economic Recovery and Future IT Investment: Q3 Insurance Industry Expectations and Strategies

by Catherine Stagg-Macey,  Craig Weber, November 16, 2009
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

The insurance industry appears to be coming to grips with the global economic crisis. The past year has been about making and implementing difficult decisions. Insurers are now focusing on getting back to delivery in 2010.

In a new report, Economic Recovery and Future IT Investment? Update on Q3 Insurance Industry Expectations and Strategies, Celent surveys insurers and vendors to ascertain their views of the credit crunch. The survey also looks into the available levers for any business—budgets, staffing levels, and strategies—and how these are being used.

Respondents remain confident that their companies are doing the right things to provide jobs, compete effectively, deliver on strategies, and succeed in both the long term and short term. "The concern over job security in Q2 has evaporated," says Catherine Stagg-Macey, senior insurance analyst with Celent's Insurance Group and coauthor of the report. "When asked about competing for new business, changes over Q2 were very noticeable, with significantly more confidence in this area."

"Claims and enterprise technologies are attracting higher levels of investment than a year ago,” adds Craig Weber, Senior Vice President of Celent's Insurance Group and coauthor of the report. “It is clear that the insurance industry generates an IT fashion cycle that reflects perceived areas of weakness and opportunity, and the availability of technology solutions that can improve operational results."

This report is the third in a series that tracks insurer responses to the crisis. The report focuses on changes between responses in Q2 and Q3 of 2009. It is based on a Celent survey that examines how insurers are responding to changing market conditions and their expectations about the impact of the crisis.

After Q4 2009, Celent will produce the final report in this series. It will look back on 2009, reflecting on how IT priorities and investments have been impacted by the global economic crisis. If current trends are any indication, insurers will be actively preparing for a flurry of investments in 2010, with an eye towards meeting future challenges.

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 Summary: Q3 Vs. Q2

7

Assessing the Industry Mood

8

 

Trends Over Time

9

 

The View Inward

9

Responding in a Crisis

11

 

Strategic Options

12

The IT Response

15

 

Delivering Strategic IT Projects in Difficult Times

16

 

IT Investment Priorities

17

Conclusion

20

 

Timing Is Everything

20

 

Next Step: A Crisis in Review

21

Leveraging Celent’s Expertise

22

 

Support for Carriers

22

 

Support for Vendors

22

Related Celent Research

23

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