Novarica study of 100 insurer CIOs reveals security spending also growing as a percentage of total budget; most digital and analytics spending still under IT umbrella
Boston, MA (Oct. 1, 2019) – Insurer IT spending is growing for 2020 as insurers seek to improve speed to market, distributor service, and analytics capabilities, according to the 12th annual Insurer IT Budgets and Projects report from research and advisory firm Novarica. The report also finds that security is consuming a greater percentage of overall IT spending than in prior years.
“While IT budgets are inching higher across the industry, but demands for new business capabilities are soaring,” said Matthew Josefowicz, president and CEO of Novarica. “Whether its improving speed to market, analytics-driven insights, or digital services, insurer technology leaders are being tasked with doing a whole lot more with just a little more budget.”
Key findings include:
- IT spending is increasing slightly for 2020. Averages vary by size and sector of company, but all are up slightly from last year. Most insurers are planning for increasing or stable budgets in 2020.
- Business leaders want new capabilities and cost savings. Speed to market, distributor ease of doing business, and BI/analytics are the most common asks from IT, but more than a third of insurers also want reduced operating expenses just as much.
- Digital and data/analytics account for more than half of “grow” and “transform” spending. More than 50% of insurers are planning for new systems or major enhancements in portals, business intelligence, and predictive analytics.
- Most digital and analytics spending is still under the IT umbrella. Fewer than 30% of insurers report significant spending on digital or data/analytics outside of IT, and even for those insurers, the majority of spending is still inside the IT budget.
A preview of the report is available online.
Novarica will present the results of the study in a webinar on October 17th at 1:00 PM ET, titled Insurer IT Budgets and Projects 2020.
Interested attendees can register here.
Overall average IT spending is inching upward for 2020 as insurers seek to improve speed to market, distributor service, and analytics capabilities. While historical patterns generally hold for budget breakdowns, there is a continuing shift toward digital and data/analytics, and a continuing embrace of cloud and Agile development. Security spending is also growing as a share of budget and as a key challenge for CIOs.
This report analyzes the results of the 12th annual survey of more than 100 insurer CIO members of the Novarica Insurance Technology Research Council.
- Budgets, including growth rates and breakdowns by spend type and focus area
- Priorities and challenges facing insurer CIOs
- Current capabilities and replacement or enhancement plans across the Novarica Insurance Core Systems Map
Click here for the table of contents or to access the report.
Novarica helps more than 100 insurers make better decisions about technology projects and strategy through retained advisory services, published research, and strategy consulting. Its knowledge base covers trends, benchmarks, best practices, case studies, and vendor solutions. Leveraging the expertise of its senior team and more than 300 CIO Research Council members, Novarica provides clients with the ability to make faster, better, more informed decisions. Its consulting services focus on vendor selection, custom benchmarking, project checkpoints, and IT strategy. For more information, visit www.novarica.com.
Source: NovaricaTags: IT, outlook / predictions, spending