Technology Investment: Carriers' IT Spending Creeping Back Upward

At the recent ACORD technology conference, keynote speaker Larry Downes offered a theory that information technology spending shouldn't be curtailed just because operating conditions are poor.Downes, a technology strategist, noted that technology should not be perceived "as an obstacle within a business," adding that insurers "can't save their way to success" by scaling back on IT investments.

Insurers might be getting the message. Following a dramatic drop in IT spending in 2002-when spending plummeted 8% from 2001, with hardware taking the largest hit-insurers are getting ready to open the wallets again. In placing an emphasis on selectivity, IT spending through 2003 is projected to grow at a modest 1.6% as insurers continue to operate in "recovery mode," states a new study by Framingham, Mass.-based IDC, a global market intelligence and e-business advisory firm.