Tug of War: The Competing Forces That Drive Insurance Technology Strategy

by Craig Beattie, April 22, 2010
Industry Trends
Global, Asia-Pacific, EMEA, Latin America, North America

Abstract

When evaluating solutions, enterprise architects have to balance a wide variety of requirements. This report presents a new way of thinking about conflicting requirements that frequently appear when assessing technology solutions.

In a new report, Tug of War: The Competing Forces That Drive Insurance Technology Strategy, Celent presents a model designed to aid in evaluating technology solutions. The model challenges insurers to understand their organisations and their key drivers.

“Methods for evaluating information technology solutions often give the impression that the various criteria and requirements are independent when this isn’t the case,” says Craig Beattie, analyst with Celent’s Insurance Group and author of the report.

This report presents a model based on five common requirements or criteria that are used to evaluate IT strategy and solutions. The criteria have been deliberately defined in the model to reduce overlap and to emphasize the tension between them. The model provides a useful discussion point in prioritising an insurer’s activities and seeking consistency in an insurer’s IT strategy.

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

 

Five Criteria for Measuring Solutions

4

Criterion 1: Cost

6

Criterion 2: Flexibility

8

Criterion 3: Agility

10

Criterion 4: Skills

12

Criterion 5: Risk

14

Use of the Five Criteria

15

 

Measuring the Importance of Each Criterion

15

Applying the Model

18

Conclusion

21

Leveraging Celent’s Expertise

22

 

Support for Financial Institutions

22

 

Support for Vendors

22

Related Celent Research

23

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