IT Spending in Insurance: A Global Perspective
Celent estimates that total insurance IT spending across North America, Europe, Latin America, and Asia-Pacific will grow to US$174.9 billion in 2015, with continued growth to US$189.2 in 2017 — a CAGR of 4.0%. This upward shift is above last year’s estimates and is the result of increased IT budgets from CIOs and increased global premiums in most regions.
In the report IT Spending in Insurance: A Global Perspective, Celent analyzes IT spending trends across North America, Europe, Asia-Pacific, and Latin America. The report compares and contrasts the direction of IT spending trends. The growth is spread across the regions at various levels, with North America and Latin America seeing the highest growth rates.
European and North American financial institutions currently account for 76% of global IT investments by insurance companies. Firms in the Asia-Pacific region account for 18%, Latin America accounts for 3%, and the Middle East / Africa / Commonwealth of Independent States account for the remaining 3%.
“Across the world, we continue to see a return to growth in IT investment, albeit at different rates depending on the region,” says Jamie Macgregor, senior vice president of Celent’s Insurance practice and coauthor of the report. “A common theme fueling growth in IT spending is digital. Insurers are trying to make sense of what opportunities exist through improved engagement and risk evaluaton."
“In Asia-Pacific, various projects are underway and continuing, especially the digital transformation initiatives,” says Wenli Yuan, a senior analyst with Celent’s Insurance practice and coauthor of the report. “Insurers are expanding their use of automation, mobility, direct sales capabilities, and customer self-service capabilities.”
“Insurers in Latin America continue to dedicate more budgets to IT in relation with direct written premium to support the investment increase,” says Juan Mazzini, a senior analyst with Celent’s Insurance practice and coauthor of the report. “However, IT spending ratios have seen an adjustment downward from the previous year’s estimates due to moderate economic and sector growth perspectives in the region.”