An electronic poll conducted during the ACORD-LOMA InsuranceSystems Forum this week revealed that insurers' informationtechnology executives are facing numerous problems at work,including the ignorance of non-IT officers regarding data standardsand inadequate funds for regulatory-compliance projects.

Although it may not represent the overall insurance ITlandscape, the survey nonetheless offered a glimpse into day-to-daychallenges confirmed by a number of chief information officersspeaking at the conference held in Orlando.

The survey was conducted during a CIO panel session titled"Confidently Meeting An Uncertain Future" and was based onresponses from more than 400 insurance IT executives usingelectronic audience-response devices.

The survey showed that nearly 80 percent of IT executives areundertaking more regulatory-compliance initiatives but that 62percent are getting no extra funding for them. Regarding legacysystems, nearly 50 percent of IT executives said their systemscontinue to pose big or somewhat big problems.

The IT executives indicated that their chief informationofficers and chief executive officers often don't see eye-to-eye:half of the respondents in the survey said they were onlymoderately confident about aligning their companies' IT andbusiness goals for growth.

The survey also showed that many insurers lack multi-year ITstrategies. While the majority of respondents said their companieshave a one-or-two year plan for prioritizing IT investments, halfsaid they don't have plans beyond that timeframe.

Further, the poll revealed that ACORD still has a tough roadahead in developing and marketing insurance data standards. Whenasked whether non-IT executives at their company understand therole of ACORD standards, 55 percent of IT executives said "seldom"while less than 30 percent said "sometimes." And more than halfsaid they don't have a corporate industry standards compliancestrategy in place.

Charles McCaig, chief information officer at the Chubb Group ofInsurance Companies, commented during the panel discussion thatproblems revealed in the poll are all too common for insurance ITexecutives: challenges coming from being asked to do more withless.

"CEOs tend to view bottom-line results and take costs out, sothere is an awful lot of pressure on corporate CIOs to run moreefficient IT operations and take costs out," Mr. McCaig said. Henoted that Chubb's IT spending would be flat until end of 2006, butwith employees' salary raises and rising vendor licenses, thateffectively translates into a shrinking budget, he said.

Regarding regulatory compliance, Mr. McCaig said Sarbanes-Oxleycorporate governance regulation and ongoing scrutiny of theinsurance sector continue to have a huge impact on insurers'IT.

"We needed to refurbish systems to do a better job ontransparency and produce data needed for compliance," Mr. McCaigsaid. "I feel that we were asked to take on an enormous effort andmake many changes with a deadline imposed. We didn't get additionalfunding, so this caused us to push aside other strategicinitiatives," he said, adding, "It was an enormous effort, and it'snot over."

Mr. McCaig acknowledged that in the course of itsregulatory-compliance effort, Chubb's IT has embraced somestandards, simplified processes and consolidated some systems,which left Chubb in a better shape. "It will give us moretransparency. It's just that it was a rough way to get there."

Prudential Financial's chief information officer Barbara Kosterechoed Mr. McCaig's sentiments. "Insurers' IT budget is stillflat-to-down from what I hear," Ms. Koster said. "Prudential's ITbudget is flat, which means we have to take dollars from somewhereelse to handle Sarbanes-Oxley, Gramm Leach Bliley and HIPAA privacyrule. We have to find better, cheaper, faster ways to implementcompliance activities, because we are not getting the money forit."