IT Trends in Small Insurers: The Latin American View

by Luis Chipana, December 22, 2014
Industry Trends
Latin America

Abstract

The effects of IT pressures, priorities, and practices can differ by size of insurer. Even being in the same marketplace and being subject to the same regulations as large insurers, small insurers have to adapt strategies and tactics to accommodate their capacities and culture.

With this in mind, Celent reviewed the information submitted by CIOs from different small insurers in the Latin American region to take a cut at this distinctive set of data.

Without disregarding compliance with regulation, small insurers are investing or considering investments in three main areas: digital transformation, IT-enabled innovation, and core system replacement or modernization.

Faster time to market for new products, streamlined and efficient processes, enhanced configurability, flexibility, and reduction of long-term maintenance costs are some of the goals for insurers upgrading and replacing their core systems. Some firms, most of them, are replacing their legacy core systems with modern technology, while others are extending functionality of policy administration systems and using service-oriented architecture (SOA) to achieve efficiency and flexibility. Greenfield projects, or those aimed at new markets such as retail and microinsurance, are also driving the adoption of modern core systems.

“Small insurers are investing or considering investments in three main areas: digital transformation, IT-enabled innovation, and core system replacement or modernization, though their investment appetite is smaller than their large and medium-size peers,” says Luis Chipana, an analyst with Celent’s Insurance practice and author of the report. “For insurers, vendors, or stakeholders in the industry, the IT trends presented in this report will provide a benchmark of what is going on and an indication of where the industry is headed.”

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

Introduction

3

 

Methodology

5

Digital

7

 

What Is Digital?

7

 

Digital Success

8

Innovation and Emerging Technologies

9

 

Innovation

9

 

Emerging Technologies

11

Legacy and Ecosystem Transformation

17

 

Core System Replacement

17

 

BPO

21

 

Cloud as a Service

22

 

The Human Factor

25

Conclusion

27

Leveraging Celent’s Expertise

29

 

Support for Financial Institutions

29

 

Support for Vendors

29

Related Celent Research

30

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