2023 North American Life Insurance IT Priorities and Pressures
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5 February 2023
Annual CIO Survey Results
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.