Smallwood Maike's Insurance Transformation, Shifting from Talk to Action

Deb Smallwood

What Is Happening To The 2009 IT Spend Projections?

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By Deb Smallwood on October 1, 2008 11:03 AM 0 0 Vote 0 Votes

The numbers are not looking very good….As we go deeper into a soft market (falling underwriting results) coupled with the deteriorating investments, the US P&C industry continues to see falling net income – 57.4% to $13.9 billion in the first half of 2008 compared to $32.7 billion in the first half of 2007. Another leading metric is the combined ration – a measurement of losses and expenses per dollar of premium is 102.1 for the first half of the year, compared to 92.7 in the first half of 2007. (The data was released by the Jersey City, N.J.-based Insurance Services Office and the Property Casualty Insurers Association of America (PCI), Des Plaines, Ill.)

As I look into the crystal ball of 2009 IT spend projections, I begin to think is this a replay of 2002 - - -where IT decisions were stalled, spending shrunk and there was a direct impact new spend. But in the last 7 years, the linkage between implementing business strategies for profitable, growth, operational efficiency, and improving customer services has become so tightly coupled and dependant with business and IT projects and initiatives.
Insurers have proven that the use of technologies tightly integrated with business processes improvements are impacting the top and bottom lines.

Technologies that enable precisions pricing (predictive analytics, scoring and use of internal & external data), straight thru processing (workflows, rules, rating and underwriting solutions), business intelligence (data integration, operational data stores, and tools) and portals (self service capabilities and automatic submissions) are essential in today’s marketplace. Ease of doing business, linking the right price to the right risk and reducing overall expenses - - are all essential to compete.

Given all of this - right now, I see the IT spend for 2009 remaining flat – with these expectations:

·Do more with less - - -finding new ways to reduce costs
·More due diligence on the ROI - - -slowing down the decision making process, making people more accountable for successful results
·Shifting more dollars from maintenance - - - to new development
·Tightly up the governance process & oversight of projects

We will continue to track these projections….and keep you all posted.

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The purpose of Smallwood Maike's blog is create a dialogue around insurance transformation; launching a different perspective on linkage between strategy, process and technology choices and shifting the mindset from a technology driven approach with SOA & BPM to a business driven service-oriented thinking that creates agile and flexible new insurance business models. Look for a wide gambit of trends, research, case studies, and insights on making transformation a reality.

Deb Smallwood

"I grew up in the insurance industry and have experienced the shackles that ineffective business processes with misaligned monolithic technology solutions have placed on insurance companies... Today, I really do believe those shackles can finally be removed with the right alignment of strategy to process to systems, and, I want to be out front in making this happen."...Deb Smallwood

A co-founder of Smallwood Maike, Deb Smallwood has held leadership roles Liberty Mutual, KPMG LLP, and TowerGroup, where she consistently found new ways to leverage technology in achieving optimal business performance.Her skill set includes business strategy, the development of business and IT roadmaps, and the delivery of application software. Prior to Smallwood Maike, Deb served as Chief Transformation Officer (CIO) for a P&C; mid-tier regional carrier.


Kyle Odermann

As a consultant and as an M&A; analyst, a critical part of my mission has always been to maximize and leverage a company's assets…assets that often derive from substantial technology investments…assets that often involve unique intellectual capital… and assets that have all too often been underutilized. At Smallwood Maike, we're working toward the same end by helping clients to realize the full potential of their investments. ...Kyle

Kyle Odermann came to Smallwood Maike from American Century Investments, where he led all day to day M&A; activities, including sourcing and evaluating potential acquisitions, securing Executive Committee/Board approval, and managing the integration of acquired businesses into the American Century portfolio.


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