The global insurance industry is showing more confidence in finding ways to invest in information technology to grow their business as premiums returned to positive growth in 2015, according to a global analyst firm.
Consultancy firm for global coverage of IT and telecommuncations, Ovum, found that insurers around the world were responding to demographic and customer change by increasing their expenditure in IT.
A survey of 389 insurance carriers as part of the ICT Enterprise Insight (ICTEI) program during the third quarter of 2015 showed that 62 per cent were looking to grow their IT budgets in 2016, while only 11 per cent were looking to cut expenditure, compared to 47 per cent that expanded and 17 per cent that slashed IT budgets in 2014/15.
However, insurers had different, complex priorities across a range of functional areas, and IT groups were being asked to meet these priorities while also tackling revenue growth, operational efficiency, and regulatory compliance.
Ovum principal insurance analyst, Charles Juniper, said Latin America would lead the way on increasing IT budgets, while Europe was also showing signs of positive growth, which gave insurers in this region an opportunity to grow their IT capabilities.
“The insurance industry, particularly in Europe, has had a long struggle to maintain profit margins since the financial crisis,” Juniper said.
“There is increased focus on operational efficiency across the board, with fraud management and underwriting systems emerging as significant areas of IT investment.
“Investment in Internet of Things (IOT) managed platforms, and investing in analytics at the point of use in particular, look like strong areas in which proactive insurers can achieve strong positive differentiation from competitors.”
