ICT spending in the insurance sector increased last year, according to a global Kable survey of 118 insurers, and this year will see further investments.
The survey finds that 55% of insurers have increased their ICT budgets in 2013, an increase of 18% compared to 2012. The survey shows that insurers are planning to increase their ICT budget portion for technology product vendors. Spending with technology product vendors is set to increase as insurers look to upgrade existing systems, and adopt advanced technologies to improve their competitiveness given increasing customer expectations.
Kable’s research reveals that insurers are allocating 39% of their software budgets to software licences, investing in software solutions that will streamline their operations and meet customer demand in a difficult global economic environment. However, in an effort to minimise costs and reduce the hassle of managing applications, insurers are slowly shifting their focus to software as a service, allocating an average of 22% of their software budgets to this category. Insurers’ investment priorities clearly reveal that demand for cloud computing is set to grow, with 74% of respondents anticipating investments in this domain through to the end of 2014.
“Insurers are assigning the greatest importance to the objectives of raising efficiency and increasing customer satisfaction”, comments Tim Gower, a Kable Research director.
“The IT objectives of better demonstrating the value of IT to the business and aligning IT with overall business goals are also playing a significant role in influencing IT investments."
The survey also reveals that IT investment decisions among insurers are mainly influenced by the cio, followed by the cfo and the ceo. Kable therefore believes that ICT providers must understand the ceo’s, cfo’s, and cio’s views of technology investment decisions to enhance their business opportunities.
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