UK Insurance 2010: The CIO Perspective

by Catherine Stagg-Macey, February 8, 2010
Industry Trends
EMEA

Abstract

Insurers in the United Kingdom are focused on growth in 2010, and need to become more agile to achieve this.

Last year was undoubtedly a bleak year for UK PLC, and insurers did not go unscathed. Predicting the UK’s position in the cycle of the recession is difficult, but insurers show remarkable optimism for 2010. In a new report, UK Insurance 2010: The CIO Perspective, Celent looks at the technology plans and priorities for UK insurers. Hard decisions have been made, including cutting budgets and letting go of staff. But this year will see a renewed and invigorated sector, with the predominant goal of growing the business.

"If there is a single lesson for insurers from 2009, it’s the importance of an agile and flexible IT operation,” says Catherine Stagg-Macey, Senior Analyst with Celent's Insurance group and author of the report. “This has to be in place to support a rapid response to unpredictable operating conditions, so it’s not surprising to see continued planned investment around core systems, specifically underwriting, policy administration, and claims."

This report reviews in detail the current business trends facing the market for 2010 and how they are impacting IT investment. Five key business themes are identified, and the broad IT investment plans and priorities for UK insurers are reviewed. Details of budgets, use of outsourcing, impact of the recession, and IT investment hotspots are also addressed in this report.

Trends and data discussed in this report reflect Celent’s experience of the market based on ongoing discussions with the industry and, specifically, deep interviews with 16 CIOs at the end of 2009 and beginning of 2010.

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

Executive Summary

3

Introduction

4

UK Insurance Market Overview

5

 

Distribution Channels

7

Business Themes for the UK

8

 

Reflecting on the Recession

8

 

Theme 1: Growing the Business

9

 

Theme 2: Cost Reduction

10

 

Theme 3: Increasing Agility and Flexibility

10

 

Theme 4: Improving Operational Efficiency

11

 

Theme 5: Meeting Regulation Changes

12

 

A Sector Comparison

12

Recession’s Impact on IT Spending

14

 

IT Budgets Hold Steady

15

The IT Investment Program for 2010

16

 

A Front Office Refresh

16

 

The Legacy Drag Effect

17

 

Turning Up the Heat in Product Configuration

18

 

Driving Costs Out

18

 

The Impact of Regulation

19

 

Views on IT Outsourcing

20

IT Investment Hotspots for 2010

21

Final Thoughts

23

Leveraging Celent’s Expertise

24

 

Support for Financial Institutions

24

 

Support for Vendors

24

Related Celent Research

25

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