So the calendar (at least the Gregorian one) has turned again and the chronological milometer has clicked from 2011 to 2012. In these purely arbitrary moments we get reflective and think big thoughts about the year past and the year ahead. We have our annual internal dialogue about things like weight loss (spontaneous combustion perhaps?) and self improvement goals (my favorite dwarf will no longer be Grumpy!).
My big thoughts, from the cosmic to the professional include: 1. I hope the Mayans are wrong; 2. (Assuming the planet survives), it is good to be in a stable and serious industry; 3. It’s good to be in IT, isn’t it?
In an important sense the insurance IT world is becoming binary—consisting of those carriers that have “gone configurable” and those that have not. If your company has successfully made the plunge into highly-configurable core systems then several good trends will begin to emerge. A recent study by Strategy Meets Action estimates that one in four P&C insurers have made the move to modern, highly-configurable core systems. For those companies several positive and beneficial trends should begin to emerge.
Insurance business innovation will both increase and accelerate. Twenty-five years ago dreamers in the insurance industry envisioned “product nurseries” where an insurance product could be quickly modeled, built and test marketed. This conception is no longer far from reality. Similarly workflows, underwriting guidelines, claim handling practices, and billing rules can be rapidly modified as needed.
Insurance legacy staffing in both IT and business operations will be reduced as will the threat of the much discussed “demographic bomb” that we face. Replace legacy systems and you can replace legacy staff (who in reality will be planning their retirement anyway).
IT has reached the boardroom. Little of significance now happens in an insurance company without a significant IT component so the opportunities to shine increase along with the opportunities to fail. Having poured millions of scarce dollars into IT initiatives companies want to know what they are getting for their money measured in terms of better customer service, speed to market, distribution support, differentiated pricing, better decision making, and reduced operating expense.
If IT wants to be treated like an important part of the business then it had best start thinking and talking like part of the business. The answer to the question “What did we get for our money?” is no longer “a new policy administration system.”
Acquisition can be a fraught and risky business, especially when it results in the merger of companies with different cultures, specializations, and market focus. It would appear the acquisition targets in our market are not weak or failing, but are relatively vibrant and healthy. This should at least give pause for thought for any CIO considering a long-term relationship with one of the “winners” alluded to above.
There are dangers for both the haves and the have-nots in 2012. The have-nots may be left behind. The haves will be scrutinized and pressured and may find themselves saying hello to a new vendor that they did not select.