Technology Spending: Optimizing Business Processes

The easing of the recent hard insurance market and equity market meltdown could signal the beginning of a strong rebound in IT spending. Pressure to achieve greater operational efficiency will continue to drive carriers' focus on business process optimization, according to a new report from Datamonitor USA, New York. Reversing recent trends, IT spending by property/casualty firms will grow more rapidly (4% CAGR to 2006) than the life/health vertical (2.6% CAGR to 2006). Also, external IT spending continues to gain momentum, specifically in services spending, which is forecasted to grow at an 8.1% CAGR to 2006. Datamonitor verifies another emerging trend: Outsourcing is the fastest area of IT spending growth for carriers with a strong CAGR of 11% between 2002 and 2006.