Equityanalyst whtpaper v8

accenture

Equityanalyst whtpaper v8

Technology

Meeting analysts’ profit, growth and capital

allocation expectations depends in large part

upon a modern IT infrastructure. When we asked

analysts their views on insurance technology, they

proved to be savvy and bullish.

Analysts rank IT modernization

as the second greatest

challenge facing the industry—

right behind climate change

for P&C carriers and portfolio

risk for Life insurers—and

the majority say technology

investment will be critical

over the next three years.

Market expectations

IT modernization was the second most

widely cited industry challenge among

both P&C and Life insurance analysts

(see Figure 9).

More than half of the analysts said

investment in core technology—such

as policy administration, claims

management and call centers—will

be “critical” to the industry over the

next three years (see Figure 10). They

also had clear opinions about what

kinds of technology investments would

improve insurers’ business performance

(see Figure 11).

What specifically do analysts want to

know about IT? Mainly, they want to

know how an insurer’s IT initiatives

support the carrier’s strategic plans.

More than half rated insurers as “poor”

at communicating about technology

strategy and only one percent rated

them “excellent.” The overwhelming

majority (82 percent) said they would

value more insight about the role

of new technologies in business

performance (see Figure 12).

Implications

Overall, analysts are expecting significant

improvement in technology performance

from insurers.

Analysts are prepared to reward

investments in credible IT strategies

that are well-executed and wellcommunicated

and form an integral

part of a growth strategy.

Analysts view disparate and outdated

technology as a major barrier to

performance for insurers. They

perceive that many insurers have

either not spent enough or not

spent wisely enough to bring their

IT systems into the 21st century.

12 Navigating to Win in Turbulent Insurance Markets

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