Global Insurance IT Spending to cross US$100 Billion by 2017, says Ovum

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Global Insurance IT Spending to cross US$100 Billion by 2017, says Ovum 
As global insurance markets recover, insurers are moving from a cost-cutting stance to investment in strategic IT projects. According to a recent research report by Ovum, it has been found that the overall global insurance IT budgets will grow at a 6.5-per cent compound annual growth rate (CAGR), with total IT spend reaching US$109 billion by 2017. Insurers are prioritizing investment that will drive customer acquisition and retention and improve operational effectiveness, says the global industry analyst.

The life-insurance sector in Asia-Pacific will see the most rapid growth - expanding at 11.6-per cent CAGR by 2017, overtaking Europe as the second-largest regional market. The key business priority for European life insurers centres on reducing operating costs. This is driving IT investment in legacy system modernization, online channels and fraud detection systems. Ovum expects to see continued expansion of IT budgets in support of consolidation/transformation and core system replacement projects, with an annual spend of nearly US$5 billion by 2017.

"The sharp decline in new business growth across all life insurance markets following the global slowdown led most insurers to rapidly and significantly cut their IT budgets. However, accelerating year-on-year growth in 2013 following some cautious expansion from 2011 confirms that life insurers are now moving from a cost-cutting mindset towards reinvestment in strategic IT projects," said Charles Juniper, Senior Insurance Analyst, Financial Services Technology, Ovum.

The key IT priorities for insurers in the emerging Asia-Pacific countries will be implementing core processing platforms......See More

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