Financial services
Insurers strike a balance on green IT
17 July 2008
A survey by Datamonitor has found that while few insurers are wholly committed to building a green IT environment, they are promoting lower energy usage through rationalisation and virtualisation.
Datamonitor surveyed 200 global insurers during the first half of 2008 and found that, despite the fact that environmental changes can amplify risks and cause lower underwriting profits, over 25 per cent of life insurers and 20 per cent of non-life insurers do not consider environmental impact when making IT decisions. Only 13.3 per cent of life insurers and 7.5 percent of non-life insurers chose the technology or strategy with the least environmental impact regardless of price or performance.
On a regional basis, Asia Pacific insurers were progressive in developing a green IT strategy, with only 20 per cent saying they do not consider the environment when making IT decisions, compared to 22 per cent in Europe and 27 per cent in North America. Over 43 per cent of Asia Pacific insurers weigh environmental impact equal to price and performance, a far greater number than Europe’s 34 per cent and North America’s 27 per cent.
However, Datamonitor stresses that an IT strategy that weighs performance above the environment can still have a significant net benefit, and notes that the industry is trying to persuade others to minimise their greenhouse gas emissions. Insurers are emphasising systems rationalisation and virtualisation as ways to reduce costs. These strategies enable cost savings through lower energy usage, which incidentally means fewer green house gas emissions, assuming the energy is derived from traditional sources such as coal and oil. Furthermore, virtualisation can lead to smaller data centres filled with less hardware, which has the environmental benefits of less land and materials use.
Additionally, by placing a greater emphasis on performance metrics such as product innovation, time-to-market and sales effectiveness, insurers will be more effective in promoting products with green incentives and developing new underwriting practices focused on the green economy. In a short time, the benefits from more hybrid vehicles on the road or the creation of more wind farms because of the availability of insurance should outweigh the detriments of a ‘non-green’ IT strategy.