Australian insurers will spend $5.2 billion on IT products and services in 2012, according to technology research company Gartner.
Regulatory reform and market volatility is forcing Australian insurance companies to reassess the technology required to run their business, Gartner stated.
According to Gartner, increased spending on technology by insurers has included internal IT, hardware, software, external IT services and telecommunications.
Although telecommunications was found to represent the largest increase in spending by insurers (predicted to reach $1.5 billion in 2012), Gartner found that spending on software was expected to grow the fastest in the coming year – up 9.2 per cent over 2011.
"External factors, such as regulatory change, uncertain economic conditions and the increasing frequency of catastrophic events, are forcing insurers to reassess their approaches to business processes and the IT applications that enable them to derive greater efficiency and achieve more with less," said Gartner principal research analyst Derry Finkeldey.
Finkeldey said the business operations of Australian insurers would benefit from applications based on cloud computing, as well as social and mobile technology.
According to Gartner vice president Kimberly Harris-Ferrante, insurers are actively investing in the next generation of core solutions that will allow them to streamline processes from the front office to the back office.
