19 January 2015 Insurance

Insurance IT spend to surpass $100bn in 2015

Global insurers will increase IT spending to almost $101 billion in 2015 with rigorous investments in technologies to boost efficiencies and innovation.

This is according to a report by IDC Financial Insights, which added that this amount is a year-on-year increase of 4.4 percent compared to 2014.

Li-May Chew, chartered financial analyst, associate research director, and global lead for IDC Financial Insights' worldwide insurance advisory service, explained that investments will center around new core applications development and management such as data warehousing, claims and policy administration systems.

“These replacements or refreshes are required as legacy IT systems become increasingly complex, inflexible, and archaic, to the point of negatively affecting technology integration and interoperability,” said Chew.

"Global insurers need to know where and how to seek pockets of growth amidst economic uncertainty. In order to regroup and focus on sustainable, profitable growth, organisations will have to confront multiple perils – ranging from reengineering or rebuilding legacy applications, to countering mounting insurance fraud – and still ensure they are well positioned to embrace growth prospects as these present themselves.”

“We expect the global insurance industry to invest more rigorously in technologies, and project global IT investments rising to almost $101 billion this year as these support campaigns to boost efficiencies and innovation.

“Geographically, the emerging markets continue to shine. While cumulated spending for these nations may still be a comparatively smaller $19 billion, this will rise at a 3-year CAGR of 6.7 percent between 2015 to 2018, which is double that of mature nations,” added Chew.

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