Insurance CIOs view many of their contributions to the organizations they serve as one of supporting new strategic initiatives, while the most important factor in CIOs’ ability to deliver on this value proposition is their relationship with business leaders. Such are the results of a new report, “Creating Enterprise Value as CIO,” issued today by New York-based research and consulting firm Novarica. The report targeted 111 members of its more than 300-member Novarica Insurance Technology Research Council, a moderated membership group of senior insurance IT executives from both the property/casualty and life/annuity sectors.
Of the 111 who took Novarica’s online survey during December 2010, approximately 33 percent represented large (more than $1 billion in premiums) companies, while 50 percent represented midsize carriers (between $100 million and $1 billion in premiums). Small carriers (less than $100 million in premium) comprised 17 percent of the total.
Approximately one-half (45 percent) of respondents across organizations of all sizes noted supporting new strategic initiatives as the CIOs’ most meaningful contribution.
“These CIOs are being judged (or are judging themselves) not by how much they can save, but by how much more than can help the company achieve,” says Matthew Josefowicz, partner in the insurance practice at Novarica and author of the report.
Approximately one-third noted that their impact on the organization was most obvious in creating efficiency and effectiveness (cutting operational costs), which, according to the report, means that these CIOs are functioning in a traditional role of helping their companies perform better and more cheaply.
Just more than a fifth of respondents reported seeing their value primarily in terms of driving innovation (operations, products/services). CIOs from mid- to small-sized carriers were more likely to choose “driving innovation in products/services” as a contributing factor to creating value. And an average of only two percent of respondents noted “identifying growth opportunities” as a primary source of creating value for their organizations.
“These CIOs have transitioned from being primarily oriented toward execution to focusing more on effecting change for their companies,” says Josefowicz.
Perhaps most noteworthy is the difference between those who cited their primary value as innovating in either product or process and the total group of CIO respondents was in their self perception. Those “innovators” are more likely to ascribe their ability to deliver innovation to their technology knowledge/skills and project/team management rather than their ability to align with the business side.
Josefowicz admits that the sample size is small, but says “it’s interesting that the innovators are not necessarily those who ‘play well with others’ – they are slightly more likely to be those with a high level of confidence in their own knowledge and ability to deliver.”
More than 40 percent of insurer CIOs think their business leaders have a poor understanding of enterprise IT issues, but only 24 percent see that as a problem. Further, only 11 percent rated their business leaders’ knowledge as “high” yet more than half said that business leaders’ knowledge served to help them obtain resources.
“So, according to our group, even a decent understanding of enterprise systems on the part of business leaders can be beneficial in securing resources,” notes Josefowicz.
Finally, while CIOs are most likely to look to their own IT staffs and other insurer’s IT staffs for future leaders, the innovators are much more likely than others to consider cross-pollinating with the business organization, according to the report.
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