The report, “IT Spending in Financial Services: A Global Perspective,” analyzes IT spending trends across different industry verticals (banking, insurance, and securities and investments) and various regions (North America, Europe, the Asia-Pacific region, Latin America and Africa).
Not surprisingly, the report finds the fastest growth will be seen in financial services institutions in Asia-Pacific, with IT spending increasing at 6.2 percent for this year. As for the insurance sector, the report pegs 2011 spending as $98 billion in 2011 across North America and Europe. Of that total, North American insurance firms are expected to spend $35.7 billion by the end of 2011.
“Insurers will still spend on technology, due to competitive pressures and efficiency mandates,” the report states. “Overall life/health IT budgets will maintain their typical range of 3% to 4% of direct premium written. And property/casualty IT budgets will be at the top of that range due to continuing mandates to address inflexible legacy systems.”
Indeed, the report says after a few fallow years, insurers must reopen their wallets to remain competitive.
“As plans for 2011 solidify, it is clear that most North American insurers are moving beyond the uncertainty that has hung over the industry for the past few years,” the report states. “The wait-and-see approach of 2008 and 2009 slowly evolved into 2010’s cautious steps forward in terms of IT and business strategies. 2011 ushers in a new feeling of urgency, where insurers realize that the brutal competition they have been in for years is only going to get worse.”
This story originally appeared on Insurance Networking News.
Bill Kenealy is a senior editor at Insurance Networking.
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