In a world where technological innovation appears to be progressing more rapidly than our ability to understand how to use it effectively, business leaders need to find a balance in the amount of resources they're committing to technology and to their employees.For example, why do we need cell phones that can take pictures? I understand that feature may come in handy for an insurance adjuster who is investigating damage to a home or auto, but do most consumers need a cell phone camera to send silly photos to their friends, as we're led to believe in TV commercials?

Our cover story this month examines insurance IT spending trends for 2004. Based on conversations that I've had with insurance executives over the last year, it's evident that insurers have become more prudent purchasers of technology.

The demand carriers place on vendors to document proven, short-term ROI before signing a contract is the result of poor purchasing decisions they made in the past. However, many insurance executives that we've interviewed recently suggest that while ROI is an important board room consideration, a more critical measure of successful IT implementation is how the project changes or affects current business processes and workflows.

It's at that intersection of people and technology where I believe insurers need to focus their attention in 2004. Taking the time to properly train agents, adjusters, underwriters, call center reps and others on the features and functionality of new technology tools not only ensures that companies get the most value for the money they're spending on IT resources, it also demonstrates a commitment to employees and the understanding that people, not technology, are what sets organizations apart.

I recently had the opportunity to ask a panel of insurance executives how their companies were affected by the East Coast blackout in August. There were stories about how cell phones didn't work and how servers and other systems were off-line for long periods of time.

But what struck me the most was the emphasis that these IT leaders placed on the need to communicate business continuity policy and procedures to employees across their organizations. Everyone present at the meeting agreed that making investments in technology and services is an important consideration for business contingency plans, but they suggested that "people" issues-evacuation procedures, personal contact information, and disseminating information to all employees-should be at the top of insurers' business continuity lists.

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