Regulation will have an important impact on the IT spending of European insurance companies in 2006 and 2007
MILAN, Italy and FRAMINGHAM, Mass., September 21, 2005 – Global independent research and advisory firm, Financial Insights, an IDC company, today announced the release of a new forecast study, which analyzes 2004-2009 IT spending forecasts for Western European insurance companies.
According to Daniele Bonfanti, program manager, and Mirko Corbetta, research analyst for the European IT Opportunity: Financial Services research, “Following some very hard years, insurance companies are ready to modernize in order to make business. This process will mainly involve delivery channels at the front end and claims processing in the back end. To achieve these two complex goals insurance companies are looking for IT vendors able to become real partners. Indeed IT is critical as insurance companies need to develop advanced IT networks that can enhance scalability, flexibility, and efficiency and deploy new revenue sources in a complex industry where competition has increased hugely over the last two years.”
According to Financial Insights’ forecasts, IT spending is expected to grow in the period from 2004 to 2009 at a compound annual growth rate (CAGR) of 3.4%, making the insurance industry one of the most important markets for IT vendors and their products. The regions that are going to show the highest growth rates are the Nordics and Spain. In terms of segments, life insurance has an increasing role in driving IT spending.
A country analysis highlights that:
IT services are expected to drive the IT spending growth, accounting for over 55% of the total IT spending in Benelux.
In France, packaged software is expected to grow at a CAGR of 4.6% because insurance will adopt external packages to enhance costs and claims management. IT services will suffer the lack of a strong commitment toward outsourcing.
IT spending in the German insurance industry is expected to grow at a 2.4% CAGR in the period from 2004 to 2009, which is a growth rate much lower than the Western European average. Software packages are expected to drive the IT spending growth, accounting for about 20% of the total IT spending.
In Italy, the expected poor economic performance for 2005 will slightly impact insurance IT budgets. Italian insurance companies will still keep IT spending under control. The major role in IT spending will be covered by packaged software. The CAGR for the forecast period will be 3.8%.
In Scandinavia, insurance IT spending is expected to be healthier than in the rest of Western Europe. The growth rate for 2004�2005 is expected to reach 3.4%, while the overall CAGR for 2004�2009 will be around 4.3%.
IT spending in the Spanish insurance sector is expected to grow substantially more than in the rest of Europe. The growth rate of 2005 spending over 2004 will be 4.6%, while the CAGR for 2004�2009 is expected to bounce to 6%
Regulation will have an important impact on the IT spending of European insurance companies once Solvency II becomes reality. In the meantime, some insurance companies have already started the analysis of what impact the new regulation will have on the IT infrastructure.
This Financial Insights study Western Europe Insurance Sector IT Spending 2005�2009 Forecast by Mirko Corbetta and Daniele Bonfanti (Financial-Insights #FIN1632, August 2005), provides a comprehensive view of IT spending dynamics in the insurance industry for the period from 2004 to 2009 and a quantitative analysis of the IT spending forecasts for the eight major Western European countries (Benelux, France, Germany, Italy, the Nordic countries, Spain, Switzerland, and the United Kingdom) for the period from 2004 to 2009.
For more information on obtaining this report, please contact: [email protected]
About Financial Insights, an IDC Company
Financial Insights provides independent research, custom consulting, and detailed multiclient studies on the technology issues and challenges facing the financial services industry. Our global research covers topics of strategic importance to corporate and retail banks, insurance carriers, asset management firms, securities and brokerage firms. Our local practices in Asia Pacific, Europe, Latin America and Canada add an in-depth regional viewpoint. Financial Insights, an IDC company, is headquartered in Framingham, Massachusetts, USA. IDC is a subsidiary of IDG, the world’s leading IT media, research, and exposition company. For more information visit: http://www.financial-insights.com.