Insurance: Strategic IT Investment Critical to Competitive Edge

Sedhu Krishnamurthy

Director of Architecture

Insuresoft, LLC

Welcome Sedhu. How important are strategic IT

investments right now?

Targeted, business-driven IT investments are more important than ever. What we hear from our insurance carrier customers is that the challenging macroeconomic conditions are providing them with the opportunity to reassess their IT priorities rather than simply eliminating all new projects. That reassessment is leading to more focused investments and better overall alignment with business objectives.

What do you recommend companies focus on?

First and foremost IT leaders must continue to demonstrate and measure the value of IT investments. Our current customers are doing this by leveraging their core policy processing technology assets to seize new market opportunities. Leveraging scalable technologies and best practices has provided them with shortened implementation timeframes, improved underwriting profitability and a greater return on their original systems investment.

What should they avoid doing?

Companies should resist the temptation to dramatically reduce their IT spending by eliminating all new projects from consideration. To be clear, I am not suggesting that carriers should increase their IT spend but instead look for opportunities to come up with creative solutions to extend the capabilities of their current assets. For example, actively partnering or performing co-development work with carriers’ core systems vendors can lead to not only reduced costs but also a broader sense of teamwork and product advancement.

New capabilities?

There are a few things that I feel will excite P&C carriers in the coming years. First, solutions that promote strategic pricing and configurability are poised to become an integral part of a carrier’s technology portfolio. Advancements in technologies like AJAX and Silverlight will further enable carriers to rapidly introduce new products while delivering the same rich user experience. Second, Software as a Service will gain acceptance with P&C carriers that value lower start-up cost and speed-to-market. The SaaS model will reduce carriers’ infrastructure and maintenance spending thereby lowering the TCO. Third, virtualization – carriers’ aspiring to lower overall IT costs will reap the benefits of virtualization through server consolidation, space and energy savings.