Celent projects that European insurers will increase their IT spending from �25.7 billion in 2006 to �37.6 billion in 2010.
IT spending at European insurers will grow at a modest rate over the next five years, according to the Celent reports, European Life and Pensions IT Spending 2006�2010 and European General Insurer IT Spending 2006�2010. The reports detail projected IT spending on a variety of areas including spending on maintenance, new projects, hardware, software, staff, services, and telecom.
“Insurance companies are playing catch-up to the banks and are waking up to the fact that IT is core to operations, and the increase in spending will reflect this paradigm shift,” says Catherine Schmitt, senior analyst and author of the reports. Both overall IT spending and spending as a percentage of new written premium is growing. European insurers currently spend approximately 2.6% of net written premium on IT. This number will increase to 3.2% over the next five years as IT becomes more important to insurers and is allocated a larger operational budget.
Meanwhile, General insurance IT spending is expected to grow from �8.1 billion in 2006 to �13.6 billion in 2010. Over that time, new project spending will shift slightly away from policy administration and claims and toward product design and distribution. This move highlights the challenges insurers are facing in heavy competition and fragmented distribution channels.
Life and Pension insurance IT spending is expected to grow from �17.6 billion in 2006 to �24 billion in 2010, in line with overall industry premium growth. 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.
Celent’s service offering falls into two categories, consulting and research, each of which is dedicated to technology in the financial services industry. We help banks, brokerage firms and insurance companies use IT to enter new markets in the shortest possible timeframes. All of our services are geared towards facilitating better informed, faster decision making. For more information visit www.celent.com.