Insurers are working hard on data, ease of business, and policy administration projects, according to Novarica’s "US Insurer IT Budgets and Projects 2015" report, which surveyed 88 insurance technology leaders in P&C, life, and annuities.
Insurance IT budgets are rising slightly -- about 3.8% on average -- but that’s in line with expected premium increases in the industry as well, Novarica says.
“Growth strategies” are the most commonly cited driver of technology spending decisions, the company found. Business intelligence and data analytics was the overall highest-cited capability that IT is expected to deliver, but that takes into account heavy P&C presence in the category. Life and annuities insurers are very focused on speed to market and making it easy for their distributors to do business.
Novarica also asked insurers to evaluate their own capabilities, and found that when it came to emerging technologies like business intelligence, analytics, and customer portals, insurers tended to have a lower view of their own prowess when compared to more traditional areas like security, financials, and claims. Life insurers in particular are planning “major enhancements” to their customer portals across the board, while P&C writers are most interested in the emerging area of analytics.
In other emerging technology areas -- the “big 4” of mobile, social, cloud, and big data -- insurers remain somewhat behind, Novarica finds. While nearly half of polled insurers have some mobile or cloud capabilities, fewer than 10% report extensive deployments in any of these emerging areas, the company says. That’s compared to 40% who are working on policy administration replacement, the many-year champion for most common IT project.
“We are starting to see a disparity between insurers who are investing heavily in their core systems and embracing the possibilities offered by emerging technology areas, and those that continue to treat IT as a problem to be solved. We believe the former group will continue to have a competitive advantage over the latter in this information industry,” Matt Josefowicz, managing director of Novarica and co-author of the report, says in the press release.
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio