Insurance replaces paper for US$4 Billion

press release

London, UK - 26th April 2001, 0800 GMT - London, UK, 6pm GMT 17 May 2001 - Zurich Financial Services, ING and Allstate Insurance are investing US$4bn in eBusiness over the next three years. This may be the tip of the iceberg with 150 leading insurance companies expected to increase their spending on eBusiness by 89% by 2004. The companies are looking to generate 19% in annual savings on average compared with only 7% today; the equivalent of US$100m annually for a global player.

"Insurance companies are merging on an almost daily basis to attain the size they deem necessary to give them sufficient economies of scale. But size isn't everything", said John Kemble, Head of eCommerce, Association of British Insurers. "Without paying sufficient attention to integration of IT resources however, they are just creating lumbering behemoths that will lose out to more fleet of foot competitors."

Insurance groups are taking advantage of the NASDAQ downturn by buying up technology and intellectual property at a fraction of its value, setting up their own synergy units or forming partnerships with technology companies. Internet Capital Group (ICG), Swiss Re and Munich Re have invested in inreon and Lloyd's of London recently announced the launch of Lloyds.com. "Our goal is for Lloyds.com to one day become the B2B insurance and reinsurance portal, the first stop for the insurance intermediary" said Nick Prettejohn, Lloyd's CEO.

The arrival of the electronic broker, claims and insurance portals will dramatically reduce costs in the insurance industry. Swiss Re is looking to save US$103m annually by the application of technology to the group's middle and back-office processing costs. It has been estimated that the industry wastes over US$50bn on time consuming paper work.

"Global insurance companies have the most to gain from the introduction of technology to reduce operational costs, cut time to issue policies and settle claims promptly," said DK Matai, Managing Director of mi2g. "Today each insurance company has multiple customer databases that can't interact with each other. The big challenge is to create one universal customer database to leverage cross and up selling of multiple products and services."


Editor's Notes:

About mi2g:

mi2g software works with financial services groups, both large and small, to change and eEnable their entire business. We automate our clients' business in such a way that they and their customers can use the World Wide Web both to increase their business volume and reduce their overall cost base.

mi2g eBusiness Solutions Engineering pays particular regard to security and advises on the management of eRisk, which incorporates Bespoke Security Architecture. mi2g's clients are mainly from the banking, insurance and reinsurance sectors.

What is Bespoke Security Architecture?

Most organisations believe that a firewall is enough to secure their sites. Bespoke security architecture brings together firewall layers, intrusion detection and other defensive structures, as well as automated intelligence techniques with legal, human resource and insurance policies.

What is eRisk Management?

eRisk Management deals with a variety of issues. associated with implementing an eBusiness. fully integrated with legacy IT systems. It includes selecting the optimum. technology set, managing external partners and. alliances, linking payments to targets, defining. rigorous quality control procedures, managing. the growth in online traffic post launch, achieving. the expected return on investment, and bringing. about the changes in the corporate culture. required for successful and secure eBusiness.

First contact for additional information - Intelligence Unit, mi2g

Telephone: +44 (0) 20 7924 3010 - Facsimile: +44 (0) 20 7924 3310 - eMail: intelligence.unit@mi2g.com

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