Risk Technology Set to Take Off
Insurance Experts' Forum, November 14, 2011
On these pages, we frequently discuss the challenges carriers face in bringing their legacy systems into the 21st century. This is a challenge, and also creates great opportunities for comprehensive systems upgrades that bring greater integration. For example, policy administration systems represent a huge embedded base of systems ripe for upgrades—such is also the case with risk management systems.
In fact, IDC Financial Insights just released market projections for the insurance and financial services sectors, and finds risk technology one of the hottest markets around. IDC forecasts worldwide IT spending pertaining to risk functions will reach over $74 billion by 2015.
The research also concludes that growth in IT spending on risk management will outpace the growth of overall IT spending in financial services, and will top 15 percent of total IT spending in financial services in 2012.
The report identifies several drivers fueling growth in risk-related technology and services investments, including regulatory uncertainty and compliance demands, mandates to improve overall corporate governance and financial performance across financial enterprises, and the need to modernize and protect critical risk management infrastructures.
“Although our macro-economic assumptions continue to point to downward pressure on overall IT spending in financial services, in our estimation, the risk technology market is large and still growing at a good clip,” according to Michael Versace, Global Risk Research Director at IDC Financial Insights.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
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