Future Tech-Insurers Must Focus on the “New Customer”, says Gartner VP

Insurers’ post-recession IT strategies must take a longer view and make better use of consumer data and their expectations. That’s the advice a U.S. insurance technology expert has for insurers boosting their IT budgets in 2010.

Although IT spending is going up in the wake of the economic downturn, it’s in danger of veering in the wrong direction, Kimberly Harris-Ferrante, vice president of Gartner, told attendees at the 2010 P&C Insurance Technology Conference February 22.

Change the course

At present, the bulk of insurers’ budgets—70%–go to maintaining their legacy systems, she said, citing the results of a Gartner survey on spending. “That’s just to ‘keep the lights on,’” she said. “That leaves little for investment in strategic projects.”

And, many companies aren’t looking far enough ahead with their planning. Most strategies span three to five years, when they should look to 10, according to Harris-Ferrante. The short- term outlook is compounded by the wrong investments, as insurers add to aging legacy systems she added. “Don’t bring in IT to make systems more complex,” she warned.

Customers of tomorrow

Going forward, insurers should ensure that investments will “grow and transform” their business. To determine where they should spend, they should include customer expectations and behaviours in that long view, she said. “Insurers don’t know the customers of today, let alone [those of] tomorrow.”

One way to get to know the current—and next—generations is to have employees bring their teenagers into work for a one-day sounding board session. “Think about how to get information,” she urged. “The processes that got you through the last 100 years are not going to work in the next 10.”

Today’s consumers—especially the younger ones—“have impatient personalities,” she said, noting that they want community-based and interactive services, which the industry isn’t offering them. “They [also] have a different view of risk,” she added. “Insurers must become a product factory for next generation demands.”

Investing in the future

So how should insurers invest in IT? Harris-Ferrante advised attendees to look to modern claims and policy management systems, web services, business intelligence and analytics, predictive modeling, advanced fraud detection, Web 2.0 and social networking tools, along with product development solutions, portals and Internet technology and mobile devices.

“These are sustainable tools that will change business models,” she said.

Copyright © 2017 Transcontinental Media G.P.
Transcontinental Media G.P.