Insurers continue to invest in IT with 76% planning to increase or hold steady their budgets in 2010, according to a newly released study. SMA Strategy Meets Action (SMA), a leading insurance industry analyst firm, disclosed these findings as part of the Insurance Ecosystem Research Series, a comprehensive study of what, why, how, and where the money is being spent from the perspectives of both insurers and IT solution providers.
The research series explores the entire ecosystem including insurers, agencies, brokers, MGAs, partners, and solution providers, with initial focus on property and casualty in the US and Canada. This groundbreaking research is broader and deeper than previous industry studies addressing IT spending and solution alignment in insurance, with data gathered from nearly 200 industry respondents, knowledge gained through more than 100 hours of interviews with senior insurance leaders, plus a substantial body of secondary research. Canadian insurers and IT providers participated in both the survey and interviews. This extensive research recognizes the myth of the average insurer � and thus provides insights by tier, major line of business and capability areas across the value chain, using the SMA Capability Model.
The number one business driver for technology decisions identified by 66 percent of the survey respondents is growth, with most insurers focusing on growth in current lines and current markets. To drive this growth, IT spending continues to shift toward the front end of the value chain, with 66 percent of respondents planning to increase spending in marketing and product development over the next three years.
“The insurance industry is silently transforming,” said Deb Smallwood, founder of SMA and co-author of the report series. “SMA has uncovered major shifts in IT spending. Demands for creative solution approaches are being driven by economic turbulence, shifting demographics, and the maturation of advanced technologies. Our Insurance Ecosystem Research Series is a fresh lens into the insurance industry � evaluating the market�s next generation of business and technology capabilities from the perspectives of both buyers and sellers of technology.”
Three reports are currently available in the series, with three more planned by year-end. “Our first report, �The Insurance Ecosystem: A Guide to the Marketplace,� is the foundational report in the series,” said Mark Breading, SMA Partner and co-author of this report. “Here you�ll find valuable baseline information about the insurance industry using the insurance ecosystem framework to look at the industry�s segmentation, tiering, and spending in a comprehensive, yet concise, manner. ” Experienced insurance professionals will benefit from a conceptual view of the insurance world that takes a different and broader perspective than is typical. Individuals and businesses that are new to the insurance community, or those considering selling to insurers, will find this report a great starting point for understanding the fundamentals and all of the pieces that make up the industry.
The second report, “Riding the Wave: Insurer Technology Spending, Drivers and Approaches” investigates how North American P&C insurers are investing in technology and positioning to ride the wave into recovery as market cycles begin to shift. This 27-page report includes detailed findings and analysis by tier on business drivers, development and implementation approaches, as well as spending projections by capability area for 2010 and beyond.
The third report, “Managing the Wave: Technology Spending and Solution Alignment” compares insurance company IT plans with IT solution provider offerings and perceptions for the North American property and casualty business. Insurers will gain insights into the IT provider landscape in terms of the current strength of solutions by capability area and where providers are investing. IT providers will use this report to recalibrate their development and marketing plans to better align with insurer needs and capture more market share.
Research for additional reports in the Insurance Ecosystem Research Series is underway. More reports for the property and casualty segment and a complete series for the life and annuities segment of the insurance industry will be published throughout 2009 and into 2010.
SMA � Tech Decisions Webcast Dec. 2, 2009
SMA will conduct a webcast with Tech Decisions on Wednesday, Dec. 2, 2009. The webcast will discuss how property/casualty insurance companies are investing in technology and positioning to ride the wave into recovery as the market cycle begins to shift. Understanding how your competitors, both larger and smaller, are utilizing IT dollars can be a crucial part of setting and achieving strategic corporate goals in 2010 and beyond.
Register now for this informative web seminar!
What you will learn:
- For insurers, the data points and insights presented can be used to aid benchmarking and checking the pulse of technology investments in the marketplace against company-specific plans and roadmaps.
- For solution providers, the data points and accompanying observations on insurer spending patterns and business drivers yield useful information for setting marketing strategies, priorities and solution alignment.
- For other industry professionals, including analysts, venture capitalists, and executives evaluating partnerships and acquisitions, the data and analysis contained in this research provides fuel for evaluation criteria.
About the SMA Insurance Ecosystem Research Series
For more information about the SMA Insurance Ecosystem Research Series, contact Mark Breading 614.562.8310 [email protected]trategymeetsaction.com, or www.strategymeetsaction.com. All reports are available for purchase online at www.strategymeetsaction.com/our-research.
SMA provides analyst and consulting services to both insurance companies and solution providers. SMA provides flexible, adaptable, business-driven, research-driven advisory services focused specifically on helping clients tap into the infinite possibilities of success. For more information, visit www.strategymeetsaction.com.