Are Insurers Slowing IT Spending?
North American insurers expected to overtake Europeans by 2015 in terms of IT spending.
Insurance Networking News, March 18, 2013
According to a new report released by Celent this morning, global IT spending by insurers will reach $140.2 billion by the end of 2013, which would represent an increase of 3.0 percent over 2012 spending.
That margin of growth would be consistent or slightly lower than in recent years; in 2012, global IT spending by insurers experienced a 3.5-percent rise.
Premium growth rates slowly climbed in 2011 and 2012 due to the prolonged economic and political challenges facing the global economy. These global challenges caused insurers to continue their cautious and calculated IT investment paths. As a result, Celent’s estimates for 2013 are similar to 2012 estimates.
Given the continued growth that is anticipated, Celent expects global spending on IT products and services to grow to $154.5 billion by 2015.
The report, “IT Spending in Insurance: A Global Perspective,” breaks down the figures by region, noting that European insurers (accounting for 36.8 percent of global IT spending) currently spend the most, closely followed by North American insurers (36.4 percent). Yet Celent notes that by 2015, North American insurers are expected to overtake European insurers and account for nearly 38 percent of global IT spending.
Latin America is experiencing the most growth, with IT spending expected to increase 7.7 percent in 2013. The report speculates this to continue and raise the region’s IT spending to $5.1 billion in 2015, while Europe will struggle and North America will continue to grow modestly.
The 11 trends Celent outlines for IT spending in North America are:
- Increased BPO and SaaS strategies
- Creation of mobile applications
- Increased awareness of social networks
- Increased use of business intelligence and analytics
- Increasing pricing sophistication
- Expanded use of telematics and usage-based insurance
- Continued rollout of next-generations core systems
- Aggressive product redevelopment and innovation
- Increasing automation, particularly around new business
- Upgrading of websites and policy holder portals for self-service
- Expansion of group and voluntary life insurance market
For more information from the report, click here.
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