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The insurance industry is facing pressures on its financial results that rival those challenging almost any other industry. On the expense side, there is increased loss--from man-made catastrophes, new environmental and liability issues, and inflation--and customer demands for better service. On the investment side, insurers' critical investment income has dropped.
At the same time, many insurers need to modernize key business processes and IT systems. They need to transform isolated applications based on products into integrated capabilities based on comprehensive customer information. Given industry conditions, projected losses, and less-than-stellar investment income, this individual product or process focus is considered neither sustainable nor affordable.
"Insurance companies need to make a cultural shift to look at their businesses from a customer view, allowing them to better up-sell and cross-sell more to generate additional revenue and cut the cost of attaining business. Additionally, customers are refocusing on their core business, specifically the underwriting discipline to better manage the business," said Cindy Maike, Global Market Segment Manager, Insurance, for IBM Software Group. "The technology exists to make this change. Insurers need to extend the functionality of their existing systems. Today, several [companies] are doing this, however, it is not a common business practice in the industry."
IBM has been a key provider of software to the insurance industry. Over a billion insurance transactions per day are handled by IBM data management products. The top 10 insurers in the world, and three-quarters of the top 50, use IBM's WebSphere products. Furthermore, IBM has the largest IT/business services organization (15,000+ dedicated) serving the insurance industry and has received over 25 insurance-specific patents since 1999.
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