Insurance Technology In 2001:
Adoption Was Slow And Slower
Even before the horrific attacks of September 11, the economy was heading south, and nowhere was this more evident than in the technology sector, where hardware and storage systems in particular were hard hit.
As slow as things were overall, however, the insurance industry in 2001 lived up to its reputation, lagging even farther behind in adopting technology initiatives.
What Your Peers Are Reading
The economic malaise in technology was obvious at Fall Comdex 2001, the computer industrys premier technology conference. According to Needham, Mass.-based Key3Media, the organization that runs Comdex, attendance was off by 30% from the 200,000 who were there in 2000. The consensus of those who did attend, however, was that the drop was more like 50%.
At a press briefing during Comdex, which was held in November in Las Vegas, a researcher for Framingham, Mass.-based IDC, said that before September 11, “things were slipping” in the information technology market, but it was “not that bad.
“By 2002, IT budgets would start growing again, we thought,” said Crawford DelPrete, senior vice president, hardware research, for IDC. After September 11, he noted, “we assumed a new worst case scenario.”
DelPrete cited lower consumer and business confidence as key factors that would stifle growth until “after the second quarter of 2002.”
Storage systems were among the hardest hit sectors of the IT market, said DelPrete, forecasting a 20% drop in sales for 2001, versus a 15% growth for 2000. This trend, he noted, was “not so much affected by 9/11.”
Hardware sales overall were expected to be down by more than 9% in 2001 and by about 1% in 2002, with a recovery in growth expected in 2003, said DelPrete.
Software sales, which had been up 12% in 2000, were expected to show a 6% growth in 2001, with larger gains in 2002, DelPrete added. Total IT spending is also expected to increase in 2002.
To the credit of technology experts in the insurance industry, these overall trends in IT spending were anticipated for 2001.
As early as January, experts in National Underwriter were advising agents and brokers to update systems and to move to new, cost-effective technologies while funding was still available.