Satya Sarangi Appointed CEO and President
London, UK (May 20, 2016) – Technavio’s latest report on the Insurance IT spending market in the US provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. Technavio defines an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
According to Amit Sharma, a lead analyst from Technavio, specializing in research on IT professional services sector, “Insurance firms in the US are early adopters of advanced IT solutions and are consistently investing in key technologies to enhance policyholder experience. The insurance IT market in the US is expected to grow at a significant rate with increased shipment of smartphones, connected devices, and networking equipment.”
The top four emerging trends driving the Insurance IT spending market in the US according to Technavio ICT research analysts are:
- Increased adoption of big data and analytics;
- Intensification of cloud computing;
- Prevalence of mobility solutions;
- Emergence of insurance tech start-up firms.
Increased adoption of big data and analytics
Big data and analytics solutions are implemented to gain meaningful insights by transforming unstructured and semi-structured data using statistical modeling tools and methodologies. Insurance firms in the US implement big data and analytics technologies for risk and compliance management. Analytics solutions help insurance firms to increase their profitability and competitiveness in the domestic as well as in the global insurance market.
Growing volume, variety, and velocity of online data require analytics solutions such as social media analytics to understand consumer buying behavior related to insurance products. Therefore, insurance firms are increasingly adopting social media monitoring and analytical tools to increase the sales of insurance products and also to analyze customer sentiments related to insurance products.
Intensification of cloud computing
The adoption of cloud computing solutions in the financial industry in the US has increased to implement flexible, scalable, and cost-effective IT solutions. Cloud-based solutions help insurance firms to decrease their total cost of ownership by reducing the upfront installation costs of IT systems. Firms subscribe to cloud-based solutions to shift from on premise to SaaS-based deployment model. Insurance firms shift to cloud-based IT infrastructure model to increase flexibility in IT resource utilization and attain cost-effectiveness through the pay per use pricing model.
Prevalence of mobility solutions
Increased penetration of smartphone adoption among consumers and insurers in the US has revamped the insurance sector. Insurers offer mobile applications to access insurance services using smartphones and tablets. The ease of accessibility and convenience factor are the major factor factors behind the increased adoption of mobility solutions in the insurance sector in the US. Mobile applications simplify insurance related activities such as online transactions, premium payments, claim management, and CRM.
Mobile application developers are adding new features such as real-time chat between policyholders and insurers to resolve customer grievances quickly. “Software developers are consistently developing functionality of mobile applications to make them user-friendly for value addition,” says Amit.
Emergence of insurance tech start-up firms
Start-up firms are entering into the insurance industry to offer technology solutions to simplify the insurance operational process. With the advent of financial technology (also known as FinTech) in the banking, financial services, and insurance (BFSI) sector of the US, the demand for IT systems to manage operations has increased. Start-up firms dominate the FinTech industry as insurance firms sign a large number of deals to procure IT systems to manage their operational processes.
For instance, start-up firms such as PokitDok offer health IT solutions to manage end-to-end operational processes for health insurance providers. Similarly, Zubie offers vehicle telematics solutions to manage risks for vehicle insurance service providers. Many of these start-up firms are located in California, New York, Texas, Florida, Massachusetts, Virginia, and Washington State in the US.
Technavio is a leading global technology research and advisory company. The company develops over 2000 pieces of research every year, covering more than 500 technologies across 80 countries. Technavio has about 300 analysts globally who specialize in customized consulting and business research assignments across the latest leading edge technologies.
Technavio analysts employ primary as well as secondary research techniques to ascertain the size and vendor landscape in a range of markets. Analysts obtain information using a combination of bottom-up and top-down approaches, besides using in-house market modeling tools and proprietary databases. They corroborate this data with the data obtained from various market participants and stakeholders across the value chain, including vendors, service providers, distributors, re-sellers, and end-users.