In 2000, insurers rode an information technology investment wave that was largely fueled by ambitious dot-com providers eager to plant their flag in the online insurance market.A year later, insurers jumped off the wave. The dot-com shakeout that intensified in 2001 meant that more than $15 billion in technology demand had suddenly evaporated. Moreover, a sliding economy contributed to a significant IT spending spiral-reducing healthy double-digit growth in 2000 to a less-than-stellar 3% growth rate last year.

The tale of these two fiscal years yields to one pressing question: What does 2002 bode for insurers as it relates to IT spending? The consensus among industry analysts is that over the next six months, the IT investment landscape will resemble the modest growth of 2001 before making a dramatic upturn by the third quarter.

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