By: Luke Jones, Published on April 30, 2017 11:30 AM, Last Update on April 30, 2017 08:32 AM
The tech spending of the global insurance industry has been revealed. A study from research and consulting form Celent shows that the industry will spend US$185 billion in 2017, which will represent a 2 percent decline compared to 2016.
Celent released the “IT Spending in Insurance 2017” report that surveyed over 50 insurance companies around the world. The firm says insurance companies in the US and Canada are the main drivers for a drop in tech spend. In North America, predicted expenditure is US$73 billion, a slip of 6 percent year-on-year.
It is likely that many insurance companies in the region have already spent on some of the technologies other global companies are now adopting. Also, Celent points out that chief information officers are predicting a downward projection for IT investments as a percentage of premiums.
Europe and Asia will increase tech expenditure in 2017. Other regions show Europe (US$69 billion), Asia (US$33 billion), Latin America (US$5 billion), and then the rest of the world at US$5 billion combined.
“In a few markets globally, we have seen a slight reduction in IT spending this year. Generally, the more mature markets remain under pressure to demonstrate value through efficiency,” commented Celent senior vice president Jamie Macgregor.
“Digitisation and, increasingly, analytics are a dominant piece of the technology investment agenda, with a clear focus on the front end of the business in sales and distribution,” he added.
Analytics will be the core focus of tech expenditure in 2017, according to the report. Also, companies will look at replacing legacy software and systems to move to the cloud. Other likely costs will be improving web services and mobile applications.