At the midpoint of 2003, researchers are busy analyzing business activity during the first half of the year and providing their forecasts for the next six months and beyond. Technology is one segment that's drawn much attention from experts, given how ingrained IT is in our economy-and how far this sector has crashed since its peak in 2000.It's no secret that many insurers have scaled back their ambitious IT growth plans. The article on page 6, "Carriers' IT Spending Creeping Back Upwards" notes that insurers on average cut their IT budgets by 8% last year. But carriers' attitudes toward IT spending appears to be changing-albeit somewhat slowly.

Recent research suggests that carriers intend to start adding more dollars to their technology budgets, but there are other subtle signs I've witnessed that indicate carriers are poised to move ahead with IT implementations.

At the ACORD annual conference in May, Mark Breading of IBM Corp. noted that business strategies that made sense six or 12 months ago are still very relevant, and that carriers need to move forward and implement these plans. "It's a matter of timing and when the upswing will occur," Breading told me.

The Bank One/Zurich deal (see page 6) is another sign that businesses are pulling the trigger on bold strategies. The integration of financial services that was made possible by Gramm-Leach-Bliley has not occurred at the pace many had expected. But if we are indeed emerging from the depths of the economic downturn, and access to investment capital steadily improves, it's quite possible that merger and acquisition activity in the financial services sector will pick up.

Another encouraging sign, I believe, is the amount of software upgrades and new product development that has occurred in the past year in the insurance IT market. Although technology companies have suffered from the lack of new business, most didn't sit and wait for the market to turn around. Indeed, while the exhibit hall for IASA's conference in 2002 resembled a wake, this year's convention had the spark of expectancy and anticipation of better times ahead.

Is it time to jump in head first, or to test the waters with your toes? That's the decision senior executives will need to make in the months ahead.

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