Last month, pessimistic long-standing predictions that the technology bubble was about to burst appeared to have been proved right.
As Microsoft's share price plummeted to around half its all-time high (and with it, many internet stocks) the bear analysts in the technology stockmarket were triumphant, while bulls got a feel for the matador's sword.
This week, Xerox, a company that is re-inventing itself from its traditional image of hardware printing packages to a 'solutions provider', came up with a piece of research that provides a number of answers as to why that dip occurred.
Xerox's study spoke to 210 financial service 'C level' executives (that means chief financial officer, chief executive, chief this, chief that, and chief the other).
The most interesting question the document management company asked 59 insurers was this: Of the following, which are your main strategy for growth and increased shareholder value over the next three years?
The breakdown of insurers' key strategies for growth was as follows:
But perhaps the most revealing statistic was that only 24% believed that product delivery through new channels would be at the heart of their growth strategies.
This shows that, for the vast majority of movers and shakers in insurance, channel conflict is not the thorny issue that we are led to believe.
In essence, the study supports the view that when the internet finally matures, the bulk of its benefits will come from streamlining and enhancing existing business processes rather than creating new retail outlets.
Pierre Danon, Xerox's European president, said the report showed that integration with existing internal systems seems at least as attractive to insurance executives as creating new internet outlets.
He said: "Everybody in financial services is creating call centres. When an agent is in front of a screen, the question is, can they access full policy information? Internet technology can enhance such services."
Here is an example of internet technology being able to improve efficiency and quality. The net will eventually allow call centre operatives to access full details of policyholder callers – previous claims, exactly what coverage they have, and what other policies the client holds, etc.
Nor is it just services for customers that can be improved. The web can also do enormous amounts to improve intermediary-insurer working relations.
Paul Harrison a broker from Berry Birch and Noble says: "Potentially, the internet could have a huge impact on insurers' service standards. If, for argument's sake, CGNU made their policy records web-enabled, we would be able to make policy alterations ourselves.
"Premium changes could be entered straight into insurers' accounts. Unfortunately, though, it seems to me that it is brokers who are way ahead of insurers in knowing what the benefits of technology could be, not the other way around."
Xerox hopes that its technology such as Internet Presentment will make such developments a reality, thus helping everyone in the sector to cut costs.
Within the insurance market, a race seems ready to start to open up systems (in a secure way, of course) to alleviate the workload at the insurer-end and let third-party companies take as much of the strain as possible.
Getting systems updated quickly will always matter more to third party companies than it does to insurers, because to third parties, this work represents their core activities.
