More than half of property and casualty insurance companies are implementing new policy administration systems, according to a survey by Ward Group. And almost half of them are over budget, as they proceed.
The Cincinnati researcher said 60 percent of P&C companies are deploying new policy administration systems, while 35 percent are putting in place new claims systems.
Of these, 46% of the projects have the system in place in at least one location. And, of those, 45% of projects are over budget.
Ward did not cite causes, but noted “a high percentage of companies use a vendor product for their new system.”
Based on study results, nearly 70% of companies also use outsourcing in some form. On average, outsourcing costs represent 14% of the information technology operating budget, Ward said.
Responding companies said getting specialized skills and resources is the most important reason for outsourcing a requirement. Overall, only a small percentage of the outsourcing resources are offshore, Ward said, but gave no quantification.
