This year's survey also provided some insight into technologies that are now emerging, such as artificial intelligence, and others, such as customer relationship management (CRM), data warehousing, wireless devices and catastrophic modeling, that slipped down the list in the survey.Perhaps no technology in recent memory has received as bad of a rap as CRM and data warehousing. Most experts believe the technology is solid; it's how organizations execute that has caused many projects to fail to live up to expectations, they say.

"CRM investments have failed," notes Todd Eyler, senior research analyst, Forrester Research, Cambridge, Mass. "Carriers need to improve their business practices in segmenting their customers and updating key business processes such as underwriting. They also need to integrate their delivery channels, which is a middleware challenge."

Many carriers are realizing that cross-selling is a cultural and organizational problem even more than it is a technology problem, says Matthew Josefowicz, a senior analyst with Celent Communications, Boston. "Many carriers are realizing that data mining is an underwriting/actuarial issue as well as a marketing issue. It's impossible to have a true sense of your exposures if you don't know which customers are holding multiple products."

However, Kelly Cannon, vice president of Nationwide Insurance, Columbus, Ohio, believes that the carrier has made wise investments in CRM technologies. "Nationwide invested more during 2002 in customer and data warehousing technologies than in any previous year," he says. "We believe our pragmatic, focused, results-oriented approach to CRM will be a real winner."

Survey participants provided these comments for some of the remaining technologies.

Artificial Intelligence: "The key to reduced costs, higher accuracy, and customer-centric operations is the ability to react in a knowledgeable way at critical junctures in the insurance workflow," says Jamie Bisker, research director, TowerGroup, Needham, Mass. "Intelligent systems and decision-management tools will become increasingly necessary for carriers to succeed."

Wireless Devices: "Providing agents with wireless capability can improve quoting, accelerate underwriting and improve close rates," says Michael LaPorta, senior insurance partner, Deloitte Consulting, Stamford, Conn. "Providing claims adjusters with wireless technology can speed adjustments and improve customer service."

Document Imaging & Management: "Another technology that has been around for awhile, but hasn't achieved the penetration that would be beneficial to the industry," Bisker says. "Carriers are moving in larger numbers to imaging and document management and are prodded in that direction by the expectations of consumers and industry partners. This may be more of a cultural and political issue than a technological issue."

Application Service Providers: "I think every insurance company should evaluate outsourcing IT as an option, even if it is for no other reason than to better understand the costs and benefits of their own IT capabilities," says Cathy Ellwood, director of development, agency technology services, Nationwide Insurance. "Too often, however, outsourcing fails to deliver on its promise because carriers fall short in their initial analysis and don't always evaluate the long-term ramifications of shifting control to application service providers."

Fraud Detection: "Better processes and analytics will yield better financial results," says Ben Bengston, partner with New York-based IBM Business Consulting. "Focused execution-focused analytics, without overspending on systems-will be an important success factor."

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