An SMA Research Report
- Author(s):
- Deborah M. Smallwood, Senior Partner
- Publication Date:
- November 14, 2013
- Number of Pages:
- 17
- Price:
- $995.00 USD
Spending on information technology-based solutions in the insurance industry is healthy. Insurers are exploiting technology for market advantage and addressing the modernization of existing systems and architectures. This report investigates the current level of spending among North American P&C insurers, and explores the trends in IT budgets and the overall technology investments that are being made by these companies. Over 70% of insurers report that spending will increase in the coming period of 2013 – 2015. 59% of insurers report that spending outside the IT budget is anticipated in their organizations in 2013, with 15% saying that the outside investments will exceed 10% of the total IT budget amount, and another 5% expecting these outside expenditures to exceed 50% of the budgeted IT spending.
More insurers report better alignment of IT investments with the business objectives and strategic initiatives of the organization. This is great news for the industry, as alignment is critical in addressing current challenges as well as driving new collaborative approaches that enable them to capitalize on opportunities. Average spending among P&C insurers is 3.3% of premium with 56% of insurers reporting they spend 3% or more.
The findings in this report are based on SMA’s portfolio of research and direct experience in working with insurers and solution providers in the insurance industry. For insurers, the information will be useful as a yardstick and for the analysis of patterns and trends that are shaping market advantages. IT solution providers will find the data and accompanying observations helpful in determining product development needs and marketing strategies. An example of the research data is shown in the figure below.
