While a majority of insurance companies seem to be all-in when it comes to upgrading their technology an area in which many insurers are behind the curve -- a surprising number have conflicted attitudes about the importance of attracting and retaining qualified employees.
According to the results of a survey entitled “The 2014 Insurance Technology and Spending Trends Report” and conducted by technology services provider Xchanging plc, 67 percent of respondents said they expect their company’s IT budget to increase this year, with 44 percent significantly boosting it by 6 percent to 10 percent or more. Additionally, technology investment was the number-one priority for 60 percent of respondents, while 86 percent ranked technology as either a first or second priority.
As for specific functions, mobility led the way with 39 percent of respondents giving it first or second priority; claims investment was the top priority for 16 percent of insurers. Only 8 percent ranked cybersecurity technology as the most valued, an interesting number given the recent rise in electronic insurance fraud.
The Xchanging survey revealed some contrasting mindsets about the industry’s priorities on recruiting top employees. Despite figures from the Bureau of Labor Statistics that point to a shrinking labor pool -- nearly half of the industry’s workforce is above the age of 45 -- only 11 percent of survey respondents ranked attracting qualified talent as the top challenge, a curiously low number given the looming talent gap. And a third of insurers polled said that talent acquisition was relatively low on their list of priorities. On the other hand, 48 percent of respondents had the “strategic sourcing of talent” as the second-highest priority, with the aim of increasing efficiency, cost savings and overall competitiveness.
Straddling both topics, 40 percent of respondents said their level of BPO engagement would increase. Of that number, more than half, 53 percent, said they would increase IT outsourcing, and 32 percent would outsource back-office services this year, including policy and claims administrative duties.
“The core messages that we are taking away from this survey is that the U.S. insurance market is ready to tackle its challenges and find a new gear in terms of growth and improvement,” said Jenna Richardson, Director, North American Insurance Services, Xchanging. “We expect to see a marked investment in advanced technologies, business processing outsourcing and IT outsourcing as companies look to differentiate their businesses, combat growing competition, and increase their market share in 2014.”
The survey fielded responses from 75 insurance industry practitioners and was conducted from May 4 to 6 at the Acord Loma Forum in Orlando.
