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

IBM Strengthens Its Ability To Help Struggling Industry WithNew Insurance Transformation Solutions And Business ConsultingServices

White Plains, NY 16. 12. 2002 (PROTEPXT/ots) - IBM said todayinsurers that become on demand businesses can achievesignificant economies of scope and scale, reduce their cost ofcapital, cut expenses from ten to more than 20 percent and offernew products and services faster.

IBM said it is well positioned to help insurers worldwideadopt e- business on demand due to a combination of its new IBMInsurance Transformation Solutions (ITS) and its greatlyexpanded consulting capabilities from IBM's new BusinessConsulting Services.

The term e-business on demand describes an enterprise whoseprocesses - integrated end-to-end across the company and withkey partners, suppliers, and customers - can respond withagility and speed to any customer demand, market opportunity, orcompetitive threat.

The IBM announcement comes at a time when insurance companiesglobally 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 agingtechnology infrastructure. IBM estimates insurers will spend asmuch as $700 billion during the next decade upgrading theirinformation technology infrastructure.

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

-- An industry vision coupled with in-depth insight andexpertise about issues facing insurers and how they can respondand 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 thatfollow 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 thetime for implementing solutions. The accelerators focus on theelements needed for successful change -- process, technology,people and culture -- while minimizing implementation risks. "Our research shows e-business on demand enables insurers tobenefit from thoughtful business processes centralization withless risk, while simultaneously decreasing expenses as much as22 percent," said William N. Pieroni, general manager, IBMGlobal Insurance Industry. "More expenses can be shifted to thevariable and discretionary side and there is more freedom todevelop new revenue sources." IBM's ITS is applicable for all types of insurance offerings -- personal, commercial, life or specialty policies, and isflexible to meet varying business requirements, legal andgeographical operating environments. One of the most important characteristics of IBM's ITS is theability to help insurers modernize their Core Insurancecapabilities of underwriting, policy administration and claimsmanagement. The ITS Core Insurance capabilities can helpinsurers intelligently grow their business by adopting newprocedures, productivity enhancements and cost saving measures.The activities range from tactical to strategic, includingimplementing over time an entirely new infrastructure and totaltransformation of their I/T systems and processes. "The number of IT solutions providers that can combine deepinsurance domain expertise with transformational capability inthe core insurance space is highly limited," said Adam Hill,lead analyst, Financial Services Technology, Datamonitor. "Inthis context, Datamonitor believes that the merger of IBM andPwCC is significant, complementing IBM's strong existing positionin the insurance market globally and allowing IBM to bring anexpanded range of business and technology transformationcapabilities to market." IBM now has more than 1000 insurance industry consultants andmore that 15,000 IBM Global Service employees working on behalfof insurance customers developing, implementing, maintaining andin many instances operating their I/T systems. Mr. Pieroni adds: "The business model followed by a majorityof insurers needs to be substantially changed so thatsustainable revenue and profits can be generated from the basicinsurance business and there is less reliance on income fromnon-insurance investments. Adopting e-business on demand is thebest way for insurers to do this while creating real value fortheir shareholders." About IBM Insurance: To learn more about IBM and the insuranceindustry please visit ibm.com and click on the insuranceindustry.

ots Original Text Service: IBM Internet:http://www.presseportal.de Contact: Mike Shore IBM Media Relations Contact Phone: 904-278-3234 Email: shore@us.ibm.com

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