Here's an antidote for those tired of the truism that the insurance industry is technologically laggard: the insurance industry leads a revival in IT spending according to IT research and advisory firm Computer Economics' newly released report IT Spending and Staffing Benchmarks 2011/2012. From a Computer Economics statement:
The study finds that median spending on IT operations is rising 5% in this sector, which is not only a substantial year-over-year improvement but also well above the median 2% growth for organizations across all sectors in the U.S. and Canada.
The wholesale distribution, discrete manufacturing, and high-tech sectors also have better-than-average improvements in IT operational spending, with median growth rates of 4.5%, 3.8%, and 3.5% respectively, the study finds.
The research firm's president, Frank Scavo says that while operational and capital IT spending are weak and uneven from sector to sector, "we are finally seeing new systems, upgrades, and infrastructure improvements back at the top of IT spending priorities."
Now, one could argue that insurers are playing catch-up to a certain extent, but I think one might make a couple of other observations: if insurers are able to bounce back quicker, it is in part because of the financial strength of the industry. However, it's also a sign that insurers are reaching a new mastery of IT in an information-driven business. I recall a few suppressed laughs when Al Gore characterized the insurance industry was a technology leader during his keynote address at the IASA show in Nashville earlier this month. I suspect the former Vice President's words will seem prophetic within a few year's time.
Anthony O'Donnell has covered technology in the insurance industry since 2000, when he joined the editorial staff of Insurance & Technology. As an editor and reporter for I&T and the InformationWeek Financial Services of TechWeb he has written on all areas of information ... View Full Bio