Carriers Suffer From IT Talent Shortage
Friday, November 23, 2001 | 264 | 0 | min read
Rating agency A.M. Best reports that there is a shortage of technology oriented insurance executives and that this is causing a problem for midsize and small carriers. While these companies would like to usher in new technologies to take them out of their legacy systems, finding senior-level executives who have solid backgrounds in insurance and are technologically savvy is proving a difficult proposition.
Experts say that the industry faces this problem because insurance companies, which were at the forefront of automation in the 1960s and 1970s, found it extremely difficult to break free of their antiquated legacy systems by the 1990s, when new vended solutions appeared on the market and Internet usage began to take off. The legacy systems that were built in those early days have required huge amounts of maintenance, and it is extremely difficult to migrate to modern systems. This is why the industry has not bred top executives with the necessary technology expertise.
Experts are saying that insurers would benefit by the example set in investment banking and other broad-based financial-services firms, which typically rotate employees in and out of technology and business functions to create a cross-pollinated work force that has industry-specific knowledge and technological expertise in every department.
For the time being, though, carriers have reluctantly been looking outside the insurance industry for technology talent.
A recent survey conducted by PricewaterhouseCoopers and the Economist Intelligence Unit in the May 2001 found that more than 150 leading insurers around the world said they expected to increase their e-business technology spending by 89% over the next three years. Yet two-thirds of those responding to the survey said their companies lacked sufficient e-business leadership capabilities.
The conclusion from PricewaterhouseCoopers was that the average insurance company out there actually can't afford the talent. The people who can actually get e-business plans up and running are in high demand and the best go to work for major vendors or big carriers.
According to the survey, many