Just the other day my office manager came by to drop off my newdesk calendar for 2003. While hardly a life-altering event, ithighlighted that another year had all but slipped by. Being everoccupied with one aspect or another of producing a magazine, Isuppose I hadnt felt the passage of time. But there it was in aglossy cellophane wrapper.

As many of us do, I began to take stock of the year gone by andspeculate on whats ahead. I think most of us would agree the lastyear has been a tough one on many levelsfrom the threat of ongoingglobal instability to personal healing from recent tragedies.Certainly the financial/business front has suffered and most likelywill continue to do so, at least for the near term.

Despite all this, though, I sense a stubborn resilience,evidenced in countless ways. In the insurance industry, the focusis on achieving and maintaining both a solid defense and a strongoffensebetter risk management and sustainable growth.

Lets see whats ahead. Based on what industry watchers arespeculating, several trends are likely. First, there probably willbe continued emphasis on better enterprise risk managementwhetherin underwriting or claimsto plug up any leaking profits. Second,insurers will be turning increasingly toward standards andstandards-based application integration technologies to transformtheir legacy systems. Third, IT and business process outsourcingwill grow for non-core functions. Fourth, IT will increasingly beleveraged and tapped as a shared service and employ the best ideasand technology, regardless of source. This will lead to newservices and products being developed in cross-functionalteams.

Finally, insurance will attain a greater awareness about thebusiness it really is inknowledge management. In 1991, datawarehousings guru Bill Inmon defined the data warehouse (for moreon data warehousing, see Affordable Housing, p. 20) as follows: Adata warehouse is a subject-oriented, integrated, time-variant,nonvolatile collection of data in support of managementdecisions. I wouldnt worry too much for now about the meaningof most of thisthe key is in the last five words.

If a company can drill down to know that a 32-year-old singlefemale who drives a Jag and owns a condo will have less of a lossexperience than a 34-year-old male who drives an Audi and rents anapartment, that company can do more accurate underwriting, setprices based on risk, tailor products, assess customer or productprofitability, and figure out its overall financial picture.

Thats one heck of a crystal ball. It has the potential to tellyou if your company will be a leader or a laggard. Obviously,technology is pivotal to making all these revelations possible, andit becomes ever more critical as products and services, and theknowledge needed to develop and grow them, increase.

So keep this in mind as you read about industry spending trendsfor the next year (p. 14) and proven ways to stretch your IT dollar(p. 17). I predict 2003 may not be easy, but it certainly neednt bebleak.

Wishing you joyous holidays and a year of peace, health,prosperity, and much happiness.

Sharon S.Schwartzman
Editor-in-Chief