Maybe the future isn’t so bleak after all. While a number of analysts already have gone on record saying IT spending for insurance companies will likely rise slightly or remain flat in the coming year, a pair of new reports from insurance analyst and consulting firm Strategy Meets Action (SMA) paint a remarkably optimistic picture, with 76% of survey respondents indicating they will increase or hold budgets steady as 2010 begins.
These findings contrast with research published earlier this month from Gartner and Property Casualty Insurers Association of America, who found in their Information Technology spending survey that the planned increase in IT spending for insurers will only rise about 0.2% from 2009 to 2010.
The reports, "The Insurance Ecosystem: A Guide to the Marketplace," and "Riding the Wave: Insurer Technology Spending, Drivers and Approaches," are the first in SMA’s Insurance Ecosystem Research Series, which address IT spending and solution alignment in the insurance industry.
In the current reports, SMA identifies growth as No.1 business driver for technology decisions, as indicated by 66% of survey respondents, with most focusing on growth in current lines and current markets. To drive this growth, IT spending continues to shift toward the front end of the value chain, with 66% of respondents planning to increase spending in marketing and product development over the next three years.
"The insurance industry is silently transforming," said Deb Smallwood, founder of SMA and co-author of the report series. "SMA has uncovered major shifts in IT spending. Demands for creative solution approaches are being driven by economic turbulence, shifting demographics and the maturation of advanced."
Additional research reports in the Insurance Ecosystem Research Series are in progress, and will continue to be published throughout 2009 and into 2010 for the property/casualty and the life and annuities segment, of the insurance industry.
For more information about the SMA Insurance Ecosystem Research Series visit the company's Web site.
This article can also be found at InsuranceNetworking.com.
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