The North American economy keeps showing signs of revival, and the “green shoots” that bravely sprouted through the rubble of the 2008-2009 financial collapse are now flowering trees and bushes. Accordingly, as recently noted in a Celent report, global information technology spending by insurance companies is growing as well, expected to grow up to six percent annually for the next two years, compared to an overall 1 percent decline last year. (Catherine Stagg-Macey, contributor here at INN, was co-author of the report.)
Celent says insurance companies will be spending a great deal of this new investment—close to half—on new technologies, versus standard maintenance of existing systems. There is a lot of pent-up demand within insurance companies, many of whom are still running legacy or home-grown systems and need to be able to progress into the digital economy.
Of course, this is all good news, as it suggests that funds are being freed up to enable technology purchases and hire the staff to pursue greater analytics, more seamless customer experiences between channels, and more networking support for brokers, agents and other partners.
However, as mentioned above, the economy at large is also expanding, and companies across the board are seeking the same new capabilities. This suggests that insurance companies that want to expand their technology repertoire will be locked in battles with other employers for the IT talent to build, install and operate these systems. For example, a title not seen a couple of years ago, the “data scientist,” is now in hot demand. There is enormous demand for anyone with the skills to manage and analyze Big Data – of which insurers have their share. Mobility is another hot area, and again, insurers are competing with companies large and small for app developers and network specialists. Cloud skills is another emerging specialty.
Insurance industry overall has been stagnant, as companies continue to streamline and pare operations to run as lean as possible while delivering more services. However, more investments will be needed in technology skills – and efforts to attract and retain talent.
Joe McKendrick is an author, consultant, blogger and frequent INN contributor specializing in information technology.
Readers are encouraged to respond to Joe using the “Add Your Comments” box below. He can also be reached at firstname.lastname@example.org.
This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.
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