There apparently was a trampoline at the bottom of the fiscal cliff, so the American economy is back to normal, so to speak. But this is a new year and that means it’s a time to reflect on the past or look to the future. Let’s take the second option and focus on some amazing predictions for insurance technology in 2013.

My first bold prediction is that more insurance companies will find a way to spread more of this year’s budget to securing its systems. We hate to keep harping on what happened to the folks at Nationwide, but the correct response to any hacking event isn’t: “I’m sure glad it wasn’t me.” No, the correct response is to be more vigilant.

Companies don’t like to talk too much about their security for fear of putting a target on their back, so don’ expect to read much about carriers explaining their plans to bolster cybersecurity, but insurers can’t afford the bad publicity or the expense of rectifying the issue.

I heard one estimate that the hacking could cost Nationwide between $80 million and $100 million to take care of their customers. That’s no Superstorm Sandy, but how many carriers have reserve funds for hacking incidents?

My second prediction is that mid-tier carriers who were hoping to get in the telematics business in the next year or so will be reassessing their position in the wake of Progressive Insurance’s decision to begin licensing some of its patented technology in 2015.

Progressive is the current market leader in user-based insurance and they are extremely vigilant when it comes to their proprietary technology. But a two-year wait for technology could be a crippling delay, particularly when you consider the fact that hardly anyone was even talking about telematics in January 2011.

My third and final prediction is that insurance technology departments will increase their focus on personnel this year. We’ve been writing for several years about how Baby Boomer technologists that grew up learning COBOL programming eventually were going to step aside and with them would go a huge amount of accumulated knowledge.

This is yet another reason why carriers need to be looking at new systems—particularly policy administration systems—that utilize newer technology.

Outsourcing isn’t going away completely, but more companies are looking closely at returning or retaining their IT operations onshore. That means IT employees should have more opportunities in 2013 and that’s a good thing for all of us.