Research organizations and insurance trade media are reporting that insurance IT spending will rise modestly in 2015, after some growth in 2014. In addition to replacing or upgrading core systems, property and casualty insurers are spending on reporting, data repositories and analytics capabilities with an eye to supporting growth. Spending on emerging technologies is increasing, but at a slower pace.
That’s generally good news for the insurers – it reflects rising premium income – and for the providers of technology. But the big question is always how to set IT investment priorities.
In helping clients sort out spending priorities, however, we have found that investments in two areas seem to generate consistent returns.
The first is data. Insurers are overwhelmed with data, coming in everywhere from call centers to social media. Solutions designed to collect, organize and provide access to data coming in from structured and unstructured sources help establish a firm foundation for planned initiatives in areas ranging from product development to operations optimization.
The second is people. Investments in identifying, training and retaining people with the needed skills to work in a digital environment pay off very quickly. It’s easy to forget, but no system is better than the people running it.
Seem simple? It isn’t. Finding, training and motivating the right people is just as hard, if not harder, than creating the right data architecture. The secret is to recognize the importance of getting both elements right.