With 2011, budgets holding within historically average ranges,insurer priorities are focused on core policy administration environments, agent portals, andbusiness intelligence, all with a goal of improving businessagility, insights, and service quality.

Those are the points taken from Novarica’s second annual stateof the industry report, “Insurance Information Technology 2011:Across the CoreSystems Map.”

Policy administration (including rating, underwriting, andproduct management) is the highest priority area for insurers in 2011, since it iscritical to introducing or modifying products, serving customersand distributors, and sourcing data for BI, according to MattJosefowicz, partner and managing director of Novarica.

The scope of policy admin system (PAS) work varies widely, fromcore to full suites, adds Josefowicz.

“Claims is a perennial focus area for property/casualty and ison many large insurers’ priority lists,” he says. “Billing as astand-alone area is not at the top of many lists for 2011, but morethan half of P/C PAS suite projects include billing. As the mostcommon interaction that insurers have with their customers, billingis a service as much as a financials issue.”

Agent portals offering both informational and transactionalfunctions have become a key component of insurers’ strategy as theystrive to be easy to do business with for their distributors,explains Josefowicz.

“Adoption of electronic applications varies by product line,with more complex underwritten products lagging behind simplerproducts,” says Josefowicz. “With the exception of specialty andlarge commercial lines, transactional agent portals are ubiquitousamong property/casualty insurers. In 2011, P&C insurers arefocused on enhancing these portals, including building out theircapabilities.”

Business intelligence is another area of focus with insurersinvesting in BI and predictive analytics to improve underwriting,claims, marketing, and internal operations, especially inP&C.

Document Creation/CCM and DocumentManagement/BPM are less common areas of high priority investment,according to the report.

“Most larger companies have acceptable solutions in place,” saysJosefowicz. “Smaller companies do not prioritize these highly, butthey do recognize needs in this area.”

Reinsurance and financial systems are generally considered lowpriority for this year, with the exception of a few largeproperty/casualty insurers with active projects primarily relatedto consolidation.

Infrastructure and security tends to be an ongoing low-gradeissue rather than an acute issue that jumps into the top-threepriorities for most companies, maintains Josefowicz. One exceptionis server virtualization, he explains, which is an active priorityfor companies that haven’t already done it. There is a movementtoward use of cloud/asp/hosted solutions in P&C, but Josefowiczreports most companies are still concerned about security andintegration.

“For 2011, top projects are similar to those in 2010—policyadministration systems, agent portals, and business intelligence,”he says. “Claims projects are also somewhat common among large P/Cinsurers. Overall, 2011 looks to be another year of do a lot morewith a little more.”