Twice as many large property/casualty insurers are deploying, piloting, or planning to pilot big data technology tools compared to last year, according to “U.S. Insurer IT Budgets and Projects 2014,” a new report from Novarica.
From the research, Novarica concludes that, while big data is still an emerging area, large P&C insurers are leading the way in building the infrastructure to support future big data operations.
This may be a sign that insurers are enacting more forward-looking technology strategies, yet IT budgets are not deviating from a consistent, controlled rise. While the report finds that the majority of insurers are planning small budget increases, average IT spending ratios are not rising notably, indicating that spending is tracking projected premium growth.
Just as IT budgets reflect continuity, insurers’ self-assessment of IT capabilities is also stable. Unfortunately that stable opinion is one of modest satisfaction. Fewer than half of insurers consider themselves to have strong capabilities in any area except IT security, financials, claims and rating. From this, Novarica concludes “most insurers are still investing to get up to the bar, not over it.“
In terms of where those budgets will be going in 2014, the survey results, which consist of 100 CIO responses from a variety of P&C and life/annuity backgrounds, indicate that the top two priorities for projects in 2014 are the same as they were for 2013 for more than half of respondents. The most common top priorities are policy administration systems, business intelligence/analytics, portals and, for property/casualty insurers, claims.
More than one-third of insurers are replacing core policy administration systems, according to the report, and about a quarter are replacing claims systems, billing, rating and underwriting. However, replacement and enhancement plans vary significantly by size and sector of company.
Overall, there are slightly more CRM and GL/Financials projects in insurers’ top-three priorities. Investments in both areas are being driven by data/analytics strategies.
In terms of investing in and deploying mobile capabilities for agents and policyholders, the results show that midsize property/casualty insurers are starting to catch up with their larger competitors. Meanwhile, another segment making a mobile push is large life/annuity companies, which have been very aggressive in deploying and piloting mobile and tablets for agents/brokers.
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