Insurance: Strategic IT Investment Critical to Competitive Edge

Dr. Mehmet Baltacioglu

President

Winsoft Software Inc.

Welcome back to our forum Mehmet. How important is strategic IT investment right now?

In difficult economic conditions, cost cutting becomes almost an immediate action taken by most companies, and strategic IT investment often becomes one of the victims. This is unfortunate because when implemented properly, IT investment inevitably becomes a lifeline for most companies when productivity becomes a major concern. When market conditions get better – and they will – companies that sacrificed strategic IT investment will soon realize that this was a short-term gain and a huge loss for future growth.

What goals should companies focus on?

The goals should be to target long-term opportunities. For instance, if a technology solution offers straight-through processing that can effectively decrease the costs for insurance carriers to process a piece of life business
60 -70%, that represents unprecedented savings. Such a solution also means substantial productivity gains for distributors of financial products. Insurance carriers should focus on such IT solutions that bring positive change.

What should companies avoid doing?

The most important item that comes to mind is to strangle innovation by unnecessary cost cutting measures. Executive management should show some strength in these times, and implement an effective plan by careful, but not excessive, cost cutting measures while having the courage to plan for the long-term goals of their corporation. Dismantlement of important productivity assets of the company just for the sake of cost cutting should definitely be avoided.

What are some of the new capabilities that carriers should be most excited about?

Innovating technology solutions on the market such as WealthServ provide straight through new business origination and delivery. Such solutions, while often overlooked, lower the cost of processing new business and increase productivity for their distribution channels. I also find the use of digital signatures and the implementation of a well-known but rarely used bar-coding technology very exciting.