02 June 2008

SURVEY: MORE THAN ONE THIRD OF US P/C INSURERS INVOLVED IN POLICY ADMINISTRATION SYSTEMS REPLACEMENTS OR ENHANCEMENTS

NOVARICA/IASA SURVEY OF P/C INSURER CIOS TRACES EVOLUTION OF FOCUS FROM E-BUSINESS TO POLICY ADMINISTRATION SYSTEMS TO PREDICTIVE ANALYTICS

(Seattle) June 2, 2008 - US P/C Insurers are actively undertaking replacements and enhancements to their policy administration systems, according to a new survey published today by research and advisory firm Novarica (www.novarica.com), in association with IASA (www.iasa.org), at the association's 2008 Annual Educational Conference & Business Show in Seattle.

The 20-page report, Budgets, Benchmarks, and Business Priorities for Insurer CIOs 2008: US Property/Casualty Edition, is based on a survey of 35 US property/casualty insurers. A companion life/annuity volume is planned for later this summer.

"Insurers have realized the strategic importance of technology, and continue to invest a steady portion of their income into maintaining and improving their capabilities," said Matthew Josefowicz, direct of the insurance practice at Novarica and the author of the report. "One picture that does emerge from the results is the very real shift in resources from addressing the major the challenges of the past to those of the present, and a clear indication of what the challenges of the future will be. We're seeing an increased maturity in e-business, a focus today on modernizing core systems, and an expectation that predictive analytics and data will be the challenge of tomorrow."

Among the key findings of the survey:

• Overall IT budgets are holding steady at 3 percent of premium. External spending was a little over half of the average budget.
• Agent e-business was the across-the-board winner for systems delivering the best ROI over the past 18 months.
• 71 percent of respondents shared five top priorities: policy administration system (PAS) replacement, e-business, PAS enhancement, underwriting, or supporting a new line of business (LOB).
• Predictive analytics across multiple areas was the most common area insurers reported as "under evaluation."
• Web 2.0 user-content areas showed up high as "under evaluation," but with a very low incidence of actual projects, while Web 2.0 technologies like AJAX were actually being implemented by more than a third of respondents.

The report includes 12 figures analyzing responses in areas including budgets, staff composition, user satisfaction rates, and top priorities. It also includes analysis of the priority levels of over 40 distinct insurance technology areas ranging from agency management system interfaces to Web 2.0.

"Partnering with Novarica to produce this report is a very important part of IASA's educational work in the insurance industry," said Joe Pomilia, executive director of IASA. "IASA members are looking for competitive intelligence, information about systems and technologies that are important to their businesses. This report provides quality information that serves the needs of the industry at large and IASA members, and we are very pleased to be a part of this effort with Novarica."

The report is available from Novarica at www.novarica.com and to IASA members at discounted pricing through the IASA website at www.iasa.org. The report will be presented in a free webinar on Wednesday, June 11 at 2 pm EST. Interested parties may register for the webinar at www.novarica.com

Press contacts:

Novarica
Matthew Josefowicz
mj@novarica.com
+1.212.401.5204

IASA
Jennifer Overhulse-King
jen@stnickmedia.com
+1.859.803.6597

About Novarica

Novarica provides information, insights, and perspective on markets, operations, and technology to financial services and insurance executives and project teams. The company delivers its service through published research, retained advisory services, and project-based consulting. Novarica's research includes market and trend analyses, best practices research, case studies, and neutral independent analyses of insurance software vendors. Novarica is an affiliate of Novantas, LLC, the leading management consultancy and information services provider for the financial services industries.
www.novarica.com

About IASA

The Insurance Accounting & Systems Association, Inc. (IASA) is a non-profit, education association that strives to enhance the knowledge of insurance industry professionals, and participants from similar organizations closely allied with the insurance industry by facilitating the exchange of ideas and information. IASA is one of the insurance industry's largest, and most well represented trade association. IASA membership includes insurance companies of all types (Property & Casualty, Life, Health, Fraternal, HMO and others) as members, as well as companies serving the insurance industry, regulators and also organizations more broadly representative of the financial services industry, including banks and investment brokerage firms. Learn more about the IASA by visiting our website at www.iasa.org or by calling (919) 489-0991.