New York, NY, USA – January 19, 2005 – Celent�s second annual in-depth survey of senior IT executives finds renewed focus on supporting growth, increased use of Web services, and a swing of the “buy v. build” pendulum back towards “build.”
In the fall of 2004, Celent surveyed 27 senior IT executives to provide a deep information resource about priorities, behaviors, initiatives, and infrastructures at US insurers. Most of the respondents were CIO-level, and all represented insurers with more than US$100 million in premium. In contrast to the findings of Celent�s 2003 survey, the focus of most respondents has shifted from cost cutting to profitability and supporting growth initiatives. Budgets are relatively flat, but they are not shrinking, and CIOs seem to be more forward-looking. There is even slightly more patience with longer ROI periods.
“The insurance industry is coming out of its shell a little bit regarding IT,” said Matthew Josefowicz, manager of Celent�s insurance group and author of the report. “Although spending increases are still modest, there is a new, forward looking mood. It�s not just about cost containment anymore.”
Key areas of focus for respondents include policy administration systems for both life/health and property/ casualty insurers for 2005. Other top initiatives include e-business/distribution technology and data mastery for P/C, as well as compliance and product development for L/H. Like the previous edition, Celent�s new report includes a detailed list of current and high-priority projects at respondent companies in over 20 categories.
Surprisingly, the “build versus buy” pendulum may be swinging back toward “build” for many new projects. “The general opinion of this year�s survey respondents has shifted from a broad consensus that �a good enough solution is probably available� to one that �it is difficult to find an acceptable solution from IT vendors,�” said Josefowicz. “This may be related to a slight lessening of pressure on cost reduction. In any case, it indicates a need for IT vendors to refocus on marketing and positioning, as well as, potentially, on product development.”
The report also includes insight into: key business trends that drive IT decision-making, average budget breakdowns and IT infrastructure mixes, use of Web services, the growing importance of enterprise data models, the use of data standards like ACORD XML and the perception of technical standards like J2EE and .NET, and the use of IT outsourcing among other areas.
The 50-page report contains 36 figures illustrating survey responses.
Celent’s service offering falls into two categories, consulting and research, each of which is dedicated to technology in the financial services industry. We help banks, brokerage firms and insurance companies use IT to enter new markets in the shortest possible timeframes. All of our services are geared towards facilitating better informed, faster decision making. For more information visit www.celent.com or contact [email protected]