The Outlook on 2010 Insurance IT Spending
Over the past couple months, insurance analysts and research firms have been sharing survey results about 2010 insurance IT spending. Firms like Strategy Meets Action and Novarica have published reports titled Insurance Ecosystem: Riding the Wave and US Insurers IT Budgets and Projects for 2010, respectively.
The findings haven’t been surprising due to the economic impact to the insurance market in 2009 and the projected turnaround this year. In both of these studies, they report that business growth strategy is the number one driver for technology spend in 2010. Following closely behind growth strategies was process optimization / operational effectiveness.
The question we must answer is, “What do these drivers mean for Enterprise Content Management (ECM) across the insurance marketplace in 2010?” Even though I wasn’t surprised by the results, I’m excited to see insurers focused on two of the biggest business drivers for ECM – increasing revenue and expense reduction.
From a strategic growth perspective, ECM can be used to facilitate the product development life cycle and distribute new product information throughout your producer network. ECM elements like automated workflows, business rules and core system integration enable insurers to grow their business and reach new geographies without having to add staff.
One of the key takeaways I took when visiting insurers late last year was the desire to re-engineer their core processes to prepare for the economic turnaround. They found that their existing processes and systems didn’t provide the agility needed to adapt to the changing economy. Many are turning to ECM as the tool to bring these process changes to fruition. Beyond automated workflows and rules engines, they are also looking for the ability to quickly integrate customer correspondence into their business processes and take advantage of Business Process Management (BPM) capabilities.
Both of these studies also reported that in most insurance markets IT budgets will be up in 2010. It will be interesting to see how that impacts ECM spend – more to come…