With apologies to Punxsutawney Phil, the economy has been seeingits shadow for well over two years now. It's also been a longwinter for the insurance industry, and it's about time we had somespringtime weather around here. The economy is beginning a fragilerecovery, tempered by factors such as housing and automobile sales,which continue to fluctuate and even contradict expectations fromone month to the next. And unemployment remains uncomfortablyhigh.

With all of these factors in play, IT has to perform a balancingact to support present-day priorities such as cost containment andefficiency while preparing for and helping to enable a return togrowth. It will be a while before premium growth returns topre-recessionary levels, but we know it will come. In the meantime,how can IT help carriers maximize profitability right now as wellbe ready to smoothly handle increasing demand as it returns? Hereare some suggestions:

- Improving process performance should be a top priority in goodtimes and bad. The cost savings potential is huge. IT can play akey role here by pushing underutilized process automation tools,such as BPM and workflow, deeper into the organization. Seek anddestroy manual workarounds and shadow systems.

- Taking steps to improve underwriting profitability will paydividends now and in the future. IT can support this endeavor byhelping to unlock and transform data that is currently toodifficult or too time-consuming to access. This can drive betterrisk-based pricing decisions, better risk selection, and greaterthroughput with less hands-on underwriter involvement. IT also canhelp bring improved analytics tools that can help identifypotential areas of growth. These might include specific regionalareas, ethnic populations, and age groups. This represents a truepartnering opportunity between IT, underwriting, and marketing.

- Providing differentiated customer service is absolutelyessential to driving retention and enabling growth. Distinctiveservice retains profitable customers and attracts new ones. Andpolicyholders and agents continue to raise their expectations basedon their non-insurance service experiences. IT is essential tosupporting the mission of providing high-level service throughdelivering next-generation relationship management systems,continuously improving online self-service functionality, enablingonline co-service processes that allow real-time personal support,delivering intuitive functionality on mobile devices, and improvingagents' ease of doing business--just to name a few.

- It's no surprise the soft economy brought an increase incertain types of claims, and fraud has risen. Workers' comp, forexample, is an area of scrutiny. IT can help improve financialresults by partnering with claims to deliver stronger claimsautomation and improved analytics from claims data. This can helpidentify cases that have the potential to drive higher losses,enabling early and appropriate intervention. One simple example isflagging low-severity soft-tissue injuries. Such claims warrant amore senior adjuster to be assigned.

- Strengthening IT management practices now will provision theorganization for profitable growth with less drama when that timecomes. Some potentials:

• Adopt agile methodologies, which result in leaner teams andmore aggressive results timetables.
• Take on fewer projects, and emphasize ones that are moreimpactful on revenue and customer service.
• Define project phases to deliver payback within a budgetcycle.
• Modernize talent management practices.

During a long winter it is common practice to clean house, fixthings up on the inside, and get ready for spring. As the marketrecovers, competitive pressures will escalate and resources willget stretched. Insurers will have to respond quickly and flexibly.Those that have used the relative lull of the downturn tostreamline and retool will be ready. Through a combination of keytechnologies and partnering with the business, IT can help makethat coming spring season a rousing success.

Rod Travers is executive vice president with The Robert E.Nolan Company, a management consulting firm specializing in theinsurance and health care industries. Rod can be reached at[email protected].

To learn more about "2010: The Road to Recovery" and tohear Rod Travers expand on how to position IT for the comingbusiness push, register for the Web seminar sponsored by TechDecisions. Click here for more information: http://www.tech-decisions.com/webSeminars/2010RoadtoRecovery/Pages/default.aspx?pc=TDseriesSite