NU Online News Service

Securities analysts who follow insurance stocks say lifeinsurers could face as much of a challenge from aging technologyover the next 3 years as they do from aging customers.

Researchers in the New York office of Accenture have publishedthat finding in a summary of results from a survey of 108 insuranceanalysts.

When asked to list the top 3 challenges facing the life sectorover the next 3 years, about 96% of the participating analystscited the perils facing investment portfolios.

Aging technology systems and changing customer demographics eachwere cited by 92% of the participants.

About 89% of the participants ranked new regulations and reformsas a major risk.

About 34% of the participants said technology investment will beimportant for life insurers over the next 3 years, and 57% saidtechnology investment will be critical.

When asked where insurance information technology investmentdollars should go, 74% of life analysts said money should go towarddistribution channels; 63%, toward pricing and underwriting; and44%, toward underwriting risk management.

The fact that analysts view technology as such a high priorityfor life insurers was a surprise, according to John Del Santo,managing director of Accenture's North American insurancepractice.

Analysts appear to believe that life insurers need stableoperations, including stable IT operations, before they can addressgoals such as developing innovative products, Del Santo says.