October 4, 2011 (NEW YORK) – Despite the recession, insurer IT spending will not slow in 2012, according a new study published today by Novarica, a research and advisory firm focused on technology strategy in insurance and financial services.
The 26-page report, US Insurer IT Budgets and Planning for 2012, is based on a survey of CIOs and equivalent executives from 132 US insurers and shows that the majority of insurers expect to increase their IT budgets slightly in 2012, as they continue to focus on delivering badly-needed business capabilities to support growth, increase competitive parity, and improve operational effectiveness.
“Insurers have a clear-eyed self-assessment of the state of their internal systems,” notes Matthew Josefowicz, partner and managing director of Novarica and author of the report. “On average, insurers rate nearly half of their systems below ‘acceptable.’ It’s the need to improve these capabilities rather than external factors like the economic recession and compliance pressures that are the primary drivers for most insurers’ IT budgets and plans.”
Other findings from the report include:
- More than one-third of insurers are either in the middle of a core policy administration system replacement, or planning one for 2012. Claims systems and billing systems have similar levels of activity.
- While agent and customer portals and business intelligence systems are less likely to be replaced, nearly half of insurers are planning replacements or major enhancements in these areas.
- Mobile, tablets, social media, and cloud are still primarily in limited deployment or pilot programs for most insurers, where they are deployed at all. While there is significant planned activity in these areas, most of these are ancillary to the major strategic projects that consume IT budgets and management bandwidth.
A four-page extract of the report is available online at www.novarica.com/report_InsIT2012. The full report can be purchased there as well.
Mr. Josefowicz will present and discuss the findings of the report on a 30-minute webinar on Tuesday, October 25 at 1pm ET. Interested attendees may register at https://www1.gotomeeting.com/register/621119184
Novarica provides information, insights, and perspective on markets, operations, and technology to financial services and insurance executives. The company delivers its service through published research, retained advisory services, and project-based consulting. Novarica’s research includes market and trend analyses, best practices research, case studies, and independent analyses of insurance software vendors. Novarica draws its knowledge from the personal experience of its principals, the ongoing information gathering initiatives of dedicated research staff, and regular communication with insurer executives through informal networks and through the Novarica Insurance Technology Research Council, a moderated knowledge-sharing community of more than 300 senior IT executives representing more than 260 North American insurers. More information at www.novarica.com.