IBM Well Positioned To Help Insurers Benefit From 'On Demand' Computing


IBM Strengthens Its Ability To Help Struggling Industry With New Insurance Transformation Solutions And Business Consulting Services

White Plains, NY (ots) - IBM said today insurers that become on demand businesses can achieve significant economies of scope and scale, reduce their cost of capital, cut expenses from ten to more than 20 percent and offer new products and services faster.

IBM said it is well positioned to help insurers worldwide adopt e- business on demand due to a combination of its new IBM Insurance Transformation Solutions (ITS) and its greatly expanded consulting capabilities from IBM's new Business Consulting Services.

The term e-business on demand describes an enterprise whose processes - integrated end-to-end across the company and with key partners, suppliers, and customers - can respond with agility and speed to any customer demand, market opportunity, or competitive threat.

The IBM announcement comes at a time when insurance companies globally are facing a serious dilemma -- almost a crisis -- caused by volatile financial markets, expanding risks (asbestos, terrorism, toxic mold) and an over reliance upon an aging technology infrastructure. IBM estimates insurers will spend as much as $700 billion during the next decade upgrading their information technology infrastructure.

IBM's Insurance Transformation Solutions are end-to-end, integrated and component-based solutions that encompass all important aspects of an insurer's value chain. ITS consists of three parts, including:

-- An industry vision coupled with in-depth insight and expertise about issues facing insurers and how they can respond and benefit by becoming e-business on demand organizations;

-- A comprehensive solution portfolio of consulting, implementation and maintenance services, along with hardware, middleware, and interoperable, component-based applications that follow open standards. The applications leverage a "best fit" approach from a community of software vendors allied with IBM;

-- Industry accelerators, which are unique insurance assets, methodologies and practices used to jump-start and reduce the time for implementing solutions. The accelerators focus on the elements needed for successful change -- process, technology, people and culture

-- while minimizing implementation risks.

"Our research shows e-business on demand enables insurers to benefit from thoughtful business processes centralization with less risk, while simultaneously decreasing expenses as much as 22 percent," said William N. Pieroni, general manager, IBM Global Insurance Industry. "More expenses can be shifted to the variable and discretionary side and there is more freedom to develop new revenue sources."

IBM's ITS is applicable for all types of insurance offerings -- personal, commercial, life or specialty policies, and is flexible to meet varying business requirements, legal and geographical operating environments.

One of the most important characteristics of IBM's ITS is the ability to help insurers modernize their Core Insurance capabilities of underwriting, policy administration and claims management. The ITS Core Insurance capabilities can help insurers intelligently grow their business by adopting new procedures, productivity enhancements and cost saving measures. The activities range from tactical to strategic, including implementing over time an entirely new infrastructure and total transformation of their I/T systems and processes.

"The number of IT solutions providers that can combine deep insurance domain expertise with transformational capability in the core insurance space is highly limited," said Adam Hill, lead analyst, Financial Services Technology, Datamonitor. "In this context, Datamonitor believes that the merger of IBM and PwCC is significant, complementing IBM's strong existing position in the insurance market globally and allowing IBM to bring an expanded range of business and technology transformation capabilities to market."

IBM now has more than 1000 insurance industry consultants and more that 15,000 IBM Global Service employees working on behalf of insurance customers developing, implementing, maintaining and in many instances operating their I/T systems.

Mr. Pieroni adds: "The business model followed by a majority of insurers needs to be substantially changed so that sustainable revenue and profits can be generated from the basic insurance business and there is less reliance on income from non-insurance investments. Adopting e-business on demand is the best way for insurers to do this while creating real value for their shareholders."

About IBM Insurance: To learn more about IBM and the insurance industry please visit ibm.com and click on the insurance industry.


Mike Shore


Media Relations

Contact Phone: 904-278-3234

Email: shore@us.ibm.com