By Cyril Tuohy
The largest information technology (IT) enhancements in 2014 in the life and annuity sector are likely to come from small and midsize carriers as they seek to replace core policy administration, distribution management and commission-management systems, according to spending projections.
Customer-facing Web portals, business intelligence reporting and customer-relationship management systems are also among the top areas where IT dollars will be spent by small and midsize carriers, the report also found.
“Growth and operational effectiveness continue to be the top strategic goals driving insurer IT budgets, with competitive parity also ranking highly,” said Novarica, an insurance technology consulting firm, in a report titled “US Insurance Budgets and Projects for 2014.”
The report, published annually, gives the industry a glimpse of where carriers are choosing to invest their resources. The results were tabulated from data collected from 22 large, small and midsize individual, group and multiline life and annuity carriers. Life and annuity respondents also consider compliance-related issues a priority, the report said.
Among small and midsize life and annuity carriers with less than $1 billion in annual premium, customer-facing Web portals are going to benefit more from IT dollars than agent-facing Web portals, the report found.
Among the 12 small and midsize life and annuity carriers polled, 58 percent said they would replace, enhance and maintain their core customer portals compared with only 25 percent of respondents who said they would improve their Web-based agent portals.
Large life and annuity carriers with annual premium in excess of $1 billion are expected to be more restrained in their IT spending compared with their smaller competitors, but they still have been “very aggressive” in deploying and piloting mobile and tablet systems for agents and brokers, the report said.
Separate surveys also have revealed a push by carriers into mobile operating platforms and hardware as they respond to requests from advisors and brokers.
In addition, large life and annuity carriers are more likely than their smaller siblings to be making major enhancements to their business intelligence reporting capabilities, followed by spending on agent and customer-facing portals, and customer relationship, document and business process management systems, the report found.
Total IT-related spending among life and annuity carriers in 2014 will be about the same as this year, the Novarica report said.
Cyril Tuohy is a writer based in Pennsylvania. He has covered the financial services industry for more than 15 years. He can be reached at Cyril.Tuohy@innfeedback.com.
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