Something is better than nothing. This mantra may describe be the silver lining in P&C insurers’ budgets for 2010 if research from industry experts is correct. Analysts are reporting 2010 P&C IT budgets to be flat or slightly higher than 2009.
Gartner and the Property Casualty Insurers Association of America’s (PCI) fourth annual joint Information Technology (IT) spending survey found that the planned IT spending increase from 2008 to 2009 is 1.6%. And, based on the data collected, the planned increase in spending from 2009 to 2010 will only be around 0.2%.
Looking forward to 2010, Matthew Josefowicz, director of insurance at Novarica, says large P&C insurers are foreseeing mostly level or slightly higher budgets, while midsize P&C companies, which saw slightly greater increases for 2009, are slightly more conservative.
This slight increase is expected despite the fact that companies are, on average, predicting a decrease in revenue of 3.7% from 2008 to 2009, according to Gartner and PCI.
Companies responded that for 2008, 59% of IT spending is dedicated to “lights-on” support, while the remainder of the IT investments are dedicated to support business growth and transformation.
“This pattern of holding steady from 2008 indicates that even with a tough economy, these companies are still making some investment in the future,” says Eric Stegman, research director, Gartner.
This article can also be found at InsuranceNetworking.com.
Carrie Burns is editor at Insurance Networking News.
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