Insurance in the age of agility
What are the pressures currently experienced by insurance industry CIOs and CTOs who are required to support business change, differentiation and innovation while maintaining a stable system of records – and all in these times of austerity? Richard Williams, CIO of Mitsui Sumitomo Insurance’s (MSI) London and European operations, explains.
Innovation – The insurance CIO’s conundrum
For the CIO charged with cutting costs and protecting an organisation’s data, innovation has not been an investment priority. The well-known irony is that for an industry that takes risk, insurance is extremely risk averse. As a result, innovative IT investments have been allowed to languish in the in-tray.
While considering technology that may give the business a competitive edge, CIOs have to deal with the fact that maintaining and updating legacy systems can easily consume most of a company’s IT operating budget. Gartner’s Worldwide Enterprise IT Spending Forecast from November 2012 reported that many companies spend up to 70% of their IT budgets on infrastructure and application maintenance or “keeping the lights on”.
Despite this figure, I believe we are at a turning point of accelerated IT adoption and innovation in the insurance industry. Deloitte’s Global Insurance Outlook 2012 highlighted that, while these are difficult times for insurers to grow their business, there is a fundamental need to change how the industry meets rapidly evolving consumer expectations; with transformation coming in the form of products, distribution, service and technology.
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