Published on the 16/02/2016 | Written by Newsdesk
Insurers are starting to take stock of how IT can help boost business as the industry exits its rocky patch…
That is according to a recent report called ‘2015 Tends to Watch: Insurance’ from global analyst firm Ovum. It believes the global insurance industry is responding to positive premium growth and accelerating demographic and customer change, recognising that it needs to make significant changes in order to stay relevant to its clientele.
Ovum reported a strong expansion in IT spend in 2015 which, it says, looks likely to continue this year. The research shows that of the almost 390 insurance carriers surveyed as part of the recent ICT Enterprise Insight programme, 62 percent are planning to grow IT budgets in 2016 and only 11 percent are expecting to cut expenditure; a significant difference when compared to the 47 percent that grew and 17 percent that cut IT budgets in 2014/15.
When it comes to investment, digital channels remain the winner in the insurance industry. However, the significant majority of insurers say they will be increasing budgets across a broad range of functional areas with no single activity completely dominating spend. This, Ovum says, reflects the complex set of priorities that IT groups are being asked to meet by the wider business, simultaneously addressing revenue growth, operational efficiency and regulatory compliance.
Principal insurance analyst for Ovum, Charles Juniper, commented: “All regional markets will see growth in IT budgets in 2016… There is increased focus on operational efficiency across the board, with fraud management and underwriting systems emerging as significant areas of IT investment.”
He said that the insurance industry has had a long struggle to maintain profit margins since the financial crisis but now that the market is picking up there is a big opportunity for IT innovation in the industry.
“Investment in Internet of Things (IoT) managed platforms, and investing in analytics at the point of use in particular, look like strong areas in which proactive insurers can achieve strong positive differentiation from competitors,” he said.
