Insurers must race to embrace E-Age -IBM. Remember I mentioning all those mainframes with all the data of insurance companies? Now IBM starts pushing them. Everything is falling in place.
The Slicon Cockroaches -data from Mainframes, to desktops and back again will fill in the next next generation networks.
Insurers must race to embrace E-Age -IBM
BY ABIGAIL LEVENE
ROME (Reuters) - The Internet will turn from bright opportunity to a dark threat for
insurers unless they hurry to embrace the electronic age, an IBM executive warned
Wednesday.
``My biggest concern for this sector is that it's not moving fast enough into the
e-world,' Ginni Rometty, general manager of IBM's global insurance sector, told Reuters in an interview.
Rometty, in Rome for IBM's global insurance executive conference, said many insurers were doing little to make the wholesale
change demanded by the electronic age. ``The world of the Internet brings great opportunity but if you do nothing it's a great
threat,' she said.
IBM Global Insurance is the leading provider of information technology business solutions to the insurance and financial services
industry.
Rometty highlighted a distinction between e-commerce -- selling online -- and e-business as a whole, which required
fundamental change in companies' working practices.
``E-business is much more than just selling over the Internet, it's changing the way the whole back office works,' she said.
``That's why it's a great threat -- in the process of changing your back office it changes all your economics.'
Insurers must focus on areas like customer loyalty, boosting global competitiveness, capturing financial services market share and
selling and offering services online, she believes.
The Internet creates a global competitiveness challenge even for those without a worldwide presence, while customers are
growing better informed.
She said data showed four percent of cars in the United States were bought on the Internet last year, while 20 percent of cars
were researched online -- and then bought at a lower price.
``You have a more knowledgeable consumer out there so you may as well play a role in how they get educated,' Rometty said,
emphasizing the importance of providing service and information.
Insurers must go head-to-head with financial services firms. U.S. figures show insurance companies' retirement assets under
management have increased by six percent a year since 1990, but financial services companies have seen growth of almost twice
that rate.
``That's a big market share for insurance companies to go and take a bite out of,' she said.
Insurance, which is one of the biggest industry sectors for IBM in revenue terms, makes external IT spending of around $23
billion a year, a sum seen growing around nine percent annually, Rometty said..
``It's a wonderful place to be right now. This is a good industry, it's a rock solid industry,' she said, but the insurance sector's
success hardened its resistance to change.
Time is of the essence, Rometty said. ``The time to do it is now, because when you start talking about the whole way the
company works in the back room, it won't happen overnight.'
International Business Machines Corp, where Rometty has worked for 18 years, was itself jolted into profound change after a
crisis early this decade when it hemorrhaged money and lost sight of where it was going.
``As we saw at IBM, the greatest thing to help you change is a crisis,' said Rometty. ``One thing we learned from that is that the
edge is never far away.' |
