In what will likely come as a great surprise to information technology professionals and insurance business professionals, IBM said its research has revealed that the amount of IT spending an insurance company does bears no relation to how successful the company is.
According to William Pieroni, General Manager, IBM Global Insurance Industry, White Plains, N.Y., IBMs research takes in the largest insurers worldwide, including both life and property-casualty carriers. Their combined $2.5 trillion in gross premiums represents a 99% global share, he said.
The IBM research sought to identify “winning insurers” with “winning strategies,” based on numbers that included total shareholder return, return on equity, combined ratio, and premium compound annual growth rate, said Pieroni. Out of some 10,000 total companies examined, about 5% are “winners,” according to those benchmarks.
Technology spending among the winners, however, was only slightly above the average, Pieroni reported, and about two-thirds of that spending was on “old technologies.”
When comparing IT spending with total shareholder return and other measures, he explained, “Its not predictable. There is no real correlation, either good or bad.”