With this annual report, Celent examines business priorities, IT budgets, and investments being made by North American life insurance company technology executives. Findings show:

• North American life insurers are increasing their IT budgets despite the tough economic conditions characterized by higher inflation and interest rates.
• CIOs are focusing on growth and digital acceleration as they plan their 2023 investments.
• Cybersecurity has moved up to third in priority and CIOs are increasing their cybersecurity budgets.
• Maintaining current systems makes up the largest proportion of the CIO budget. Internal and external budget allocations are nearing parity.
• Policy administration, billing and claims systems rose to the top of core system investment plans. Underwriting systems are still important, but they dropped as an investment priority for 2023.
• Insurers are planning less investments in front-end components for 2023 compared to 2022.
• Insurers want to improve their analytics capabilities and leverage artificial intelligence where possible.
• They tend to develop front end and data and analytic systems, but typically purchase core systems.
• Celent has observed a growing use of low-code/no-code (“LCNC”) platforms for system development. LCNC platforms allow business staff toconfigure front end interfaces’ changes for instance.
• A small majority of insurers surveyed consider the outsourcing approach such as BPO.
• Today, over 75% of NA life insurers are considering a cloud deployment approach depending on the system types.