The global insurance industry’s tech spending is expected to reach US$185 billion in 2017, a 2% year-on-year drop, according to a study by research and consulting firm Celent.
In its “IT Spending in Insurance 2017” report, which surveyed over 50 insurance carriers worldwide, Celent revealed that North American insurers are the prime drivers of the drop in tech spend, with expected expenditures of US$73 billion, a decrease of 6%. This is in contrast with Europe and Asia, where spending on technology is steadily rising.
According to the report, the decrease in technology spending was likely due to chief information officers’ downward projections for IT investments as a percentage of premiums.
Want the latest insurance industry news first? Sign up for our completely free newsletter service now
Despite the decrease, North America is still the region with the most technology investments, followed by Europe (US$69 billion), Asia (US$33 billion), Latin America (US$5 billion), and then the rest of the world at US$5 billion combined.
“In a few markets globally, we have seen a slight reduction in IT spending this year. Generally, the more mature markets remain under pressure to demonstrate value through efficiency,” commented Celent senior vice president Jamie Macgregor.
“Digitisation and, increasingly, analytics are a dominant piece of the technology investment agenda, with a clear focus on the front end of the business in sales and distribution,” he added.
The study also forecasts that companies will allocate most of their IT budgets on improving analytics capabilities, replacing legacy systems with cloud-based ones, and upgrading websites, mobile applications and portals for more user-friendliness.
Hong Kong urged to keep pace on fintech
Blockchain tech laboratory for the insurance industry launched
Cyberattack could cause next big financial crisis, says MAS head