Where the Money Is

Claims technology will be in focus for property/casualty insurers in 2006, and policy administration systems will continue to be the centerpiece for life insurers, analysts from Gartner predict.

Writing for the P&C market, research vice president Kimberly Harris-Ferrante predicts investment in claims technology and process improvement projects will increase by more than 20 percent this year among property/casualty insurers. In her research report, Harris-Ferrante notes: "Although claims are the most critical service events in the P&C insurance sector, insurers have overlooked it for substantial IT investment during the past few years. This will change in 2006 as leading insurers aggressively invest in reducing losses, improving service quality, and streamlining claims processes."

Among the recommendations Harris-Ferrante makes for insurers is streamlining the end-to-end claims process to automate and reduce the administrative tasks performed by adjusters and claims professionals.

Writing for the life insurance market, research vice president Todd Eyler predicts one-quarter of the world's largest life insurance companies will begin projects in 2006 that will make available up to 30 percent of their IT costs. Eyler indicates: "After a decade of inaction, five of the world's top-20 life insurers will begin policy administration system consolidation projects for systems that support individual life and annuity products. These high-risk, high-reward projects will help determine which life insurers continue to grow."

He suggests insurers go beyond cost metrics and justifications within the business case and include projected improvements in turnaround times in areas such as new-product development, underwriting decisions, and paying producers.