DCG Ecommerce Solutions - Analysts: Tech Risks May Outweigh Regulatory Risks

Just Ahead: The Web As A Virtual World

Imagine being able to have a digital replica of yourself stroll from one site to another

When Google Earth launched in 2005, users were exhilarated to type in their home address, see the earth as if they were floating in space, and then swoop down to view a satellite image of their house or apartment. These days users have moved on to upgrading Google Earth with their own photographs and three-dimensional digital replicas of buildings. But one day they'll be able to alight on a Google Earth street and meet someone else there--and even have a conversation.

Click for Translation

Analysts: Tech Risks May Outweigh Regulatory Risks

BY JIM CONNOLLY
NU Online News Service, April 14, 2008, 6:47 p.m. EDT

Securities analysts who follow insurance stocks say life insurers could face as much of a challenge from aging technology over the next 3 years as they do from aging customers.

Researchers in the New York office of Accenture have published that finding in a summary of results from a survey of 108 insurance analysts.

When asked to list the top 3 challenges facing the life sector over the next 3 years, about 96% of the participating analysts cited the perils facing investment portfolios.

Aging technology systems and changing customer demographics each were cited by 92% of the participants.

About 89% of the participants ranked new regulations and reforms as a major risk.

About 34% of the participants said technology investment will be important for life insurers over the next 3 years, and 57% said technology investment will be critical.

When asked where insurance information technology investment dollars should go, 74% of life analysts said money should go toward distribution channels; 63%, toward pricing and underwriting; and 44%, toward underwriting risk management.

The fact that analysts view technology as such a high priority for life insurers was a surprise, according to John Del Santo, managing director of Accenture’s North American insurance practice.

Analysts appear to believe that life insurers need stable operations, including stable IT operations, before they can address goals such as developing innovative products, Del Santo says.