Handling the Crisis: Update on Q1 Insurance Industry Expectations and Strategies
The global financial crisis continues to have a significant impact on insurers. While insurers have low expectations for immediate improvements in performance, the outlook for 12 months from now is strikingly more positive.
In a new report, Handling the Crisis: Update on Q1 Insurance Industry Expectations and Strategies, Celent surveyed insurers and vendors to ascertain views of the impact of the credit crunch. The survey also looked into the available levers for any business - budgets, staffing levels and business strategies -- and how these are being used at this time.
The impact of the financial crisis on 2009 budgets was somewhat mixed, but the effects on investment decisions seem more moderate. Half of the projects are being reprioritised, but are moving forward. Another third are being delayed or postponed.
"Insurers are pessimistic about the outlook for the broader economy, but they remain bullish on their own companies’ strategies," says Craig Weber, Senior Vice President of Celent's Insurance Group and coauthor of the report.
"While the focus right now is undoubtedly on cost, there appears to be a noticeable shift in how insurers view IT in a time of crisis," says Catherine Stagg-Macey, Senior Analyst and coauthor of the report. "The question for CIOs is how technology can help the business reduce costs. This is an important change from previous recessions, where IT costs were cut indiscriminately."
"Stripping out costs by being smarter positions the insurer for improved profitability when the cycle turns," Weber adds.
This report is the first in a series that will track insurers’ responses to the crisis. It is based on a Celent survey that examines how insurers are responding to changing market conditions and their expectations about the impact of the crisis.