It’s that time of year for reports on IT investments in the insurance industry. As would be expected, core systems, portals, and business intelligence again rank as the top three spending initiatives. While most studies provide extremely useful information about where major investments are being made, there are many initiatives thatdon’t necessarily involve the largest budgets, but still have significant business impact and alignment to strategies.
This year, SMA’s annual ECO System Series survey on IT spending, business drivers, and priorities opened the aperture to expose a wider perspective of industry investment insights—giving additional detail about how and where investments are being directed. SMA looked at 30 investment initiatives (in both vertical business application and horizontal software project areas) and compared areas where insurers are replacing existing systems or adding entirely new ones, to areas where insurers are investing in major enhancements to existing systems. The insights are quite fascinating and point out some emerging trends that might ordinarily get lost behind the big-spend stories.
Insurers continue to strive for cost containment, business process improvements, workflow management, and gaining new insights with data and analytics. Figure 2 illustrates how insurers are approaching projects that relate to horizontal software IT investments. At least a third of insurers report that they have major project plans in the following areas: Business Intelligence (BI), Business Process Management (BPM), Master Data Management (MDM), predictive analytics, workflow systems, and cloud computing. Collectively, these technologies bring efficiency, effectiveness, and transparency to the operations of the business.