Data Environment Challenges Increase Cost of Insurance IT Projects by more than 25%, Study Reports

BOSTON - March 4, 2015 - PRLog -- March 4, 2015 (BOSTON) — A new report published through the Novarica Research Partners Program, finds that data environment challenges increase the cost of insurer IT projects by more than 25% on average. The report titled: “Challenges and Opportunities in Enterprise Data for P&C Insurers” is available online at http://www.novarica.com/RPP/.


The report is based on interviews with CIOs at large P&C insurers, a majority of whom see a growing reliance on data and analytics across their businesses.  In 2015, the study estimates that P&C insurers will spend about 13% of their new project budgets on data-related projects, equivalent to nearly a billion dollars across the industry.

The report highlights that accessible and reliable enterprise data is the fuel that powers the analytics revolution, and insurers need accessible and reliable enterprise data to support vital initiatives, including:

• Predictive analytics programs in underwriting and claims

• Straight-through processing initiatives that demand strong models

• Cross-sell and upsell strategies

• Account-aware underwriting and service

• Enterprise risk management

• Customer profitability analysis

At the same time, the study highlights the fact that insurer IT leaders have had challenges creating the business case for enterprise data quality investments. “While the value of enterprise data quality is uniformly recognized, it is difficult to quantify in the standard models that most insurers use to prioritize IT investment,” said Matthew Josefowicz, President of Novarica. “Management practices will need to evolve to consider a broader range of factors if insurers are going to be able to build a solid data foundation.”

“Informatica is proud to highlight these important business and technology issues for insurers.  There is no doubt that good quality data; secure, mastered, governed and with good management practices is critical to the insurance business.  Informatica’s solutions provide not only great data, but also the ability to show discreet ROI for insurance organizations.  We look forward to helping insurers be data ready addressing the top challenges noted in the study,” said Josh Lee, Global Director of Insurance Marketing at Informatica, which underwrote the study through the Novarica Research Partners Program. The program provides an opportunity for industry sponsors to underwrite surveys of insurer CIOs. Underwriters collaborate on survey design with Novarica, which then performs the research and analyzes the results completely independently, with full respect for participant anonymity. For more about the Novarica Research Partners Program and to download a copy of this report, see http://www.novarica.com/RPP/.

About Novarica
Novarica provides technology strategy research, advisory services, and consulting to more than 80 property/casualty and life/annuity insurers. Its knowledgebase covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and of nearly 400 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project checkpoints, and IT strategy. More information at www.novarica.com