TechDecisions

"What we see in the results of our second quarter study is theconsensus seems to be the worst is over," said Craig Weber, seniorvice president with Celent.

Weber was one of three industry analysts taking part in the Webprogram "State of the Market: Where We Are, Where We're Going."Joining him were Matt Josefowicz, director of the insurancepractice at Novarica, and Maurice DiMeo, a partner with Ernst &Young.

There is a good deal of evidence emerging the recession may bebehind insurers, Weber pointed out, and some of the marketperformance issues are definitely turning in the rightdirection.

"How fast we get back, if ever, to the kinds of performance wesaw three or four years ago is not exactly clear, but I think wehave basically turned the corner," he said.

"In terms of how that affects technology and other types ofproject work with insurers, we believe things are definitely movingagain. People are looking for [technology] solutions."

When asked by panel moderator Sharon Schwartzman, editor inchief of Tech Decisions magazine, about what insurers needto be concerned with in terms of customer-facing technology such associal networking, Josefowicz issued a warning to insurers.

"There's a little bit of a danger of insurers approaching Web2.0 the way they approached Web 1.0," he said. "There was anincredible amount of hype [around Web 1.0], and companies wastedmoney on things that were not strategic. A number of othercompanies hid their heads in the sand."

As the Internet took center stage, particularly in therelationship between distributors and carriers, the companies thathid their heads in the sand missed out on the value being createdby the Web, according to Josefowicz.

"We think companies should pay attention to the impact of socialnetworking and think about it in relation to their own onlinemarketing strategy," he said. "It's a very important component ofthat strategy. But I don't think they should budget a quarter oftheir IT budget on social networking."

The focus on regulatory compliance has increased of late, andDiMeo feels some smaller insurers may not be prepared for what theyare facing in the future. "A lot of smaller insurers are not ready,especially given there hasn't been the strongest oversight [in thepast] from a regulatory perspective," he said.

"Smaller insurers haven't had to deal with all the complianceissues, but now they are going to have to," said DiMeo. "The Officeof National Insurance--the White House's plan to have the TreasuryDepartment regulate insurance--is the wild card."

For larger insurers, the issue around compliance involvescomplexity, added DiMeo.

"[Insurers] are complex organizations, and the geography comesinto play," he said. "The ability to regulate that is challenging.It comes back to issues such as data integrity. If you lack dataintegrity, it is hard to build systems to manage risks."

To listen to the entire archived discussion, go to www.tech-decisions.com and click on Web Seminars.