What’s New: In Brief (January 10, 2008)

The Canadian insurance market can expect to see more consolidation in 2008, according to Philip H. Cook of Omega Insurance Holdings Inc.
Speaking at a CIP Symposium breakfast meeting at the National Club in Toronto, Cook read off the names of about 22 players in the Canadian insurance industry that have disappeared over the past year as a result of consolidation.
He guessed specialty underwriters, in particular, would continue to enter the Canadian market. He suggested the result might be a “polarized” market containing at least 10 major insurers doing most of their business in general lines, with another 30 smaller insurers doing most of their business in specialty lines.
He noted that Canada, with one insurance company for every 100,000 people, might be the “most over-serviced insurance industry in the world.” For this reason, he added, the market “has to consolidate, and I think it will.”

Year 2008 will see insurance companies continuing to invest in new IT applications and solutions, including more interactive Web 2.0 technology, according to Celent, an insurance IT consulting firm.
“At the top of the list of the most important challenges and opportunities facing insurance CIOs and CTOs in 2008 is maintaining growth in a softer and more uncertain market, by investing in new business and underwriting solutions and by upgrading other core systems,” says Donald Light, senior analyst with Celent and coauthor of Celent’s report, ‘Insurance CIO/CTO Pressures, Priorities, and Plans in 2008: US Survey Results.’
The report notes that in 2008:
insurers are deploying Web 2.0 technologies for ease of use and communication. Some insurers in the United States used some of the various technologies grouped under the Web 2.0 umbrella. The most frequent uses were related to better Web site usability and facilitating communication within teams and with external partners;
insurers are viewing consolidation of software vendors more negatively now than a year ago. Concerns include a lack of innovation, and not seeking business from smaller carriers; and
Windows and Linux are gaining some ground as operating systems.