Much hasn’t changed for insurance IT budgets over the past few years, and the same should hold true for 2011. Based on responses from 122 of its Insurance Technology Research Council, Novarica predicts IT budgets for 2011 are poised to increase modestly across most classes of insurers.
According to Novarica’s report “US Insurers IT Budgets and Projects for 2011,” average projected 2011 IT budgets for insurers range from 2.2% of premium for large life/annuity/health insurers to 5.1% for small property/casualty insurers.
Insurers continue to focus their IT spending on delivering badly needed business capabilities to support growth and reduce overall operating expenses, but the highest priority areas vary widely by size and sector of company and even within those groups, the report states.
At the top of the priority list is policy administration and business intelligence, along with claims, agent portals and commissions tracking slightly behind. By and large, the top priorities are unchanged from Novarica’s April 2010 survey that also prognosticated what projects would be important in 2011.
However, the research firm points out that the previous survey did show an increased growth of general ledger and ERP projects, which now show only single-digit percentages in life/annuity/health and large property/casualty naming these projects in their top three.
In April, Novarica predicted the following trends would continue into 2011:
• Focus on the role of IT in supporting growth
• Focusing tightly on delivering on needed business capabilities above all
• A significant growth in investments in core systems to deliver these business capabilities
The research firm expects these trends to continue to hold into 2011.
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Corrected December 10, 2010 at 11:57AM: yes