In the latest sign that consumerization of IT is overtaking insurance, 59% of insurers responding to SMA's recent "IT Budget and Spending Realities and Trends in the North American P&C Insurance Industry" survey say that there is "significant" technology spending outside the IT budget.
A much smaller amount, but still notable 5%, said that IT spending outside the IT department was equal to or greater than 50% of the actual IT budget.
"The traditional walls around the IT budget are morphing and exploding at the same time. As collaboration among business units increases and the integration of processes and data across the insurance value chain becomes reality, the customary funding sources are shifting and expanding," says Deb Smallwood, SMA founder, in a statement. "While the bottom-line demand for technology and solution value has not changed, the urgency, as well as the spirit of cooperation for the benefit of the company, are in the process of changing in major ways."
Smallwood also identified five key business drivers that trigger insurance technology investment:
- Business growth in current lines/markets/geographies
- Business optimization
- Competitive pressure
- Cost containment
- Business growth through new lines/markets/geographies
The top challenges that stifle investment remain familiar: respondents identified issues around business/IT alignment, resource distribution, and aging workforce and infrastructure.
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