IT Trends in Small Insurers: The Latin American View
The effects of IT pressures, priorities, and practices can differ by size of insurer. Even being in the same marketplace and being subject to the same regulations as large insurers, small insurers have to adapt strategies and tactics to accommodate their capacities and culture.
With this in mind, Celent reviewed the information submitted by CIOs from different small insurers in the Latin American region to take a cut at this distinctive set of data.
Without disregarding compliance with regulation, small insurers are investing or considering investments in three main areas: digital transformation, IT-enabled innovation, and core system replacement or modernization.
Faster time to market for new products, streamlined and efficient processes, enhanced configurability, flexibility, and reduction of long-term maintenance costs are some of the goals for insurers upgrading and replacing their core systems. Some firms, most of them, are replacing their legacy core systems with modern technology, while others are extending functionality of policy administration systems and using service-oriented architecture (SOA) to achieve efficiency and flexibility. Greenfield projects, or those aimed at new markets such as retail and microinsurance, are also driving the adoption of modern core systems.
“Small insurers are investing or considering investments in three main areas: digital transformation, IT-enabled innovation, and core system replacement or modernization, though their investment appetite is smaller than their large and medium-size peers,” says Luis Chipana, an analyst with Celent’s Insurance practice and author of the report. “For insurers, vendors, or stakeholders in the industry, the IT trends presented in this report will provide a benchmark of what is going on and an indication of where the industry is headed.”