The global insurance industry is undergoing a major restructuring as the impact of radically altered customer expectations, changing demographics, shifting market dynamics, increasingly intrusive regulation, new entrants, and highly disruptive technology is being felt across all markets. An insurance carrier's response to these fundamental market shifts is crucially dependent on having an effective IT and technology strategy that underpins the organization's wider business strategy. Ovum believes that as carriers struggle to meet these technology challenges, a greater proportion will be driven to look at building long-term, strategic relationships with IT service providers. This will in turn progressively change the nature of the relationship expected from service providers by their insurance carrier clients, which will increasingly move beyond the much-vaunted, but rarely fulfilled, "trusted IT advisor" model. As the support offered by an IT service provider becomes an increasingly critical element in the effective execution of a carrier's business strategy, making the correct choice of partner – or partners – will become one of the most important decisions to be made by insurance executives, with major long-term implications for carriers.
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