I hope you checked out our Insurance Holiday Gift Guide and particularly our Geek Gift Guide written by Paul Rolich. As we enter the final two weeks of 2012—and the holidays that go with them—the time for reflection on the past 12 months is also upon us.
The insurance industry’s emergence from the economic horrors of 2008 and 2009 were beginning to fade from our consciousness and “the recovery” as we all hoped for, was beginning to take shape. For technologists, that meant investment in new systems was about to returning.
Over the course of the year, insurance carriers made plans for new projects and carried out earlier projects that focused on an aggressive transformation of their business that seized upon opportunities that had been passed over for years.
Particularly exciting has been the determined way insurers have attacked what remains the largest problem IT leaders face: aging policy systems that fail to offer the flexibility needed for carriers to take advantage of the new developments facing the industry.
It’s difficult to pin down a number for those fortunate carriers that have moved beyond their legacy systems. Anecdotal estimates from analysts and insurers I’ve spoken with are around 30 percent of carriers with modern systems; impressive, but still a long way to go.
Beyond Superstorm Sandy, which reminded carriers once again of the importance technology has in handling claims and preparing for catastrophes through disaster recovery plans, the scariest situation that insurers faced this year was the announcement just two weeks ago that one of the industry’s major players was the victim of a security breach.
Nationwide’s announcement that approximately 1.1 million customers or potential customers had personal information exposed to hackers is costly to the insurer not only in its damaged reputation, but in the cost of fixing things as well.
Estimates of between $75 and $100 million for Nationwide to pay for credit reports and such for those affected by the breach make it a catastrophe of its own for the insurer.
For the rest of the industry it’s another reminder of the dangers of our online world. Budgets for 2013 have already been completed, but don’t be surprised if many companies revisit their security plans for 2013.
The holiday season is a time for reflection, while the new year—here soon enough—is the time for action. Here’s hoping you can enjoy the holiday season and look back in a largely successful year for insurance IT. Happy Holidays.