Insurers plan to invest in IT in the coming years and that spend will be on core systems, according to a new report from research and consulting firm Strategy Meets Action (SMA). The report, “Insurance Ecosystem: Positioning for Growth”—based on SMA’s analysts’ considerations, opinions and insights—indicates that the increase is steady and sticking around. SMA estimates that 57 percent of insurers plan to increase IT spend, compared to 40 percent in 2010. While on average, budgets will increase by 4 percent in 2012, 2013 and 2014, 10 percent of all insurers plan to increase budgets by more than 10 percent for the three-year period, according to SMA.
Organic growth, along with cost containment and expense reduction and customer service, is driving the investment increase. Looking at past years and the fact that this is the first year customer service has made it into the top five drivers, SMA says there is a significant shift in how insurers view the importance of customer service.
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