Back in the seventh grade, the teacher hung a poster on the wall with the slogan, “In life, as in chess, forethought always wins.” It seems more insurers are taking this to heart with regard to IT spending. IT spending can be described as a case of “pay me now, or pay me later.” Recent trends indicate that more than half of insurers plan to increase IT spending in 2012 with a focus on reducing expenses and improving customer service. The past practice of implementing “siloed” IT infrastructure projects may be gone as well, as more systematic integrated approaches to IT improvements now seem to be required.
As an example, the last 10 years have seen the advent of business intelligence (BI) projects through data-warehousing. Such projects can go a long way toward reducing long-term expenses and improving customer service, assuming companies can absorb the initial IT costs. Duplicate and overlapping information systems can be replaced and single source data reporting capabilities can drive efficiencies. Carefully planning and expense management are needed when implementing such IT projects, but long-term cost savings and improved data access and data quality can pay rich dividends. Insurers certainly wouldn’t mind additional long-term cost savings, and actuaries wouldn’t mind better quality data.
How about you? Is your insurance company planning to increase IT spending? Do you think there is a benefit to increased IT spending? In general, are insurers spending enough on IT?