Celent projects that US insurers will spend US$28.8 billion on IT in 2005�a figure that will grow to US$42 billion in 2010.
New York, NY, USA, February 14, 2005 – Celent�s newest insurance reports, US L/H Insurer IT Spending 2005�2010 and US P/C Insurer IT Spending 2005�2010, project modest proportional growth over the next five years. The reports break projected spending down among maintenance and new projects, hardware/software/staff/services/telecom/ other, and 11 different functional areas.
“US insurers spend between 2.5 percent and 3 percent of premium on IT,” said Matthew Josefowicz, manager of Celent�s insurance group and author of the report. “Celent believes that over the next five years, this will increase to between 3 percent and 3.5 percent as IT becomes even more essential to insurance company operations and consumes a larger portion of operating ratios. As overall premium grows modestly over the next five years, IT spending will essentially keep pace.”
P/C insurance IT spending is expected to grow from US$13.2 billion in 2005 to US$20.8 billion in 2010. Over that time, new project spending will shift slightly away from policy administration and claims and toward product design and distribution.
L/H insurance IT spending is expected to grow from US$15.6 billion in 2005 to US$21.2 billion in 2010. Over that time, new project spending will shift slightly away from policy administration, underwriting, and IT infrastructure and toward product design, distribution, claims, and billing.
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