Insurance companies' reliance on a "plethora of disparate systems and technologies" has led to a significant overlap of IT infrastructure and application functionality, according to a recent Datamonitor report, "U.S. Insurance Technology Opportunities."One issue carriers are expected to address in the next five years is re-engineering and replacing their aging core systems. Hardware spending is expected to grow to $4.1 billion in 2006 from $3.7 billion in 2003, according to Datamonitor. Furthermore, insurers plan to increase spending on standardizing architectures and application functionality. Datamonitor reports that integration spending will jump to $2.4 billion in 2006 from $1.9 billion in 2003.

The inflexibility of current IT environments is a top concern of CEOs and CIOs, according to a recent report from Celent Communications. Among surveyed CIOs and CTOs, 56% reported that current legacy systems prohibit workflow improvements, while an equal number believe their current systems impede systems integration.

As carriers look to reduce maintenance costs by switching to cost-effective hardware and software, 63% of survey respondents expect to increase their reliance on Windows at the expense of mainframe and IBM's AS/400 platforms.

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