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By Steve Ranger, 6 February 2006 12:35

NEWS

Insurers need to "get serious" about slimming down their IT systems this year as costs and competitive pressures increase.

According to analyst house Financial Insights, "too many" is the catchphrase for many insurers at the moment.

It said in a statement: "Too many policy administration systems, too many claim management systems, too many billing systems. In 2006, competitive and cost pressures will force insurers to get serious about rationalising the number of operational systems they support."

Coupled with this, insurers will look at building a broader IT platform for their business, which will get them thinking about enterprise-wide systems rather than point developments, it predicted

Financial Insights senior insurance research analyst Barry Rabkin said in a statement: "Insurable events are happening around the globe quicker and with significantly more impact to insurer's bottom lines than ever before. Competitive success increasingly will depend on the insurer's ability to leverage up-to-date information to become more agile and responsive.

"Insurers need to restructure their operations to have significantly fewer core administrative systems and to move beyond point solutions to platforms that support secure enterprise-wide applications to achieve the requisite agility."

Security will continue to be a big area of investment, as threats will come even fasters and in more places as more devices are used to access information throughout the insurer's value chains, the analyst warned.

The analyst group also predicts that western European banks will look to improve their core banking systems this year to replace legacy spaghetti junctions and IT silos.