Technology is a top concern for insurance companies, according to a global research report into the sector by HP.
Bucking the recent global financial turmoil, insurance firms were highly active in 2009, investing, in particular, in modernising and streamlining applications, technology to improve the efficiency of internal processes and outsourcing.
Despite the optimism and investment in the sector, half the CEOs questioned strongly felt that technology was a risk. Sean Wells, insurance executive within HP Enterprise Services, said this could be explained because of worries over security and data leaks and the need to prepare for upcoming legislation. The biggest impact, however, was likely to be the high level of legacy kit preventing them from being agile as they would like.
Over-reliance on legacy hardware and software was also a contributing factor behind the fact that executives said they didn’t have the information they needed to run the business.
Many of the insurance firms also did not view technology as a source of competitive advantage. “If you go to Lloyd’s and the London Insurance market, they do not see technology as a differentiator in itself,” said Wells.
While large, global players did recognise the importance of technology, smaller, bespoke players needed see its competitive power or risk losing out to newer competitors.
“We are seeing new centres of insurance across the world and they have a greater ability to use technology to speed customer interaction and reduce process costs. Lloyd’s and the London Insurance market are under threat over time; if they don’t respond, business will move elsewhere. In the long term they have to see technology as a differentiator,” said Wells.
