IT Spending in Insurance: A Global Perspective

by Jamie Macgregor,  Juan Mazzini,  Karen Monks,  Wenli Yuan, April 7, 2014
Global

Abstract

Total insurance IT spending across North America, Europe, Latin America, and Asia-Pacific will grow to US$162.1 billion in 2014, with continued growth to US$176.7 in 2016 — a CAGR of 4.4%. This upward shift is above last year’s estimates and is a result of the cautious upturn in the global economy.

In the report IT Spending in Insurance: A Global Perspective, Celent analyzes IT spending trends across North America, Europe, Asia-Pacific, and Latin America. The report compares and contrasts the direction of IT spending trends. The growth is spread across the regions at various levels, with North America and Latin America seeing the highest growth rates.

European and North American financial institutions currently account for 74.5% of the global IT investments by insurance companies. Firms in the Asia-Pacific region account for 18.3%, Latin America accounts for 4.2%, and the Middle East / Africa / Commonwealth of Independent States account for the remaining 3.0%.

“Across the world, we are seeing a return to investing in growth.  Digital distribution and customer acquisition are hot topics as insurers look to keep the cost to serve low,” says Jamie Macgregor, Senior Vice President of Celent Insurance and coauthor of the report.  “Not all regions are progressing at the same rate, however. The Americas and Asia are growing strong, but the outlook for Europe is still mixed.”

“Although investment returns are still low, insurers need to focus on improving the core business result,” adds Karen Monks, Analyst in the Insurance practice and coauthor of the report. “Simply put, this means investing in technology to attract clients, retain clients, and maximize the underwriting result.”

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

1

Introduction

3

 

Definition of IT Spending

3

The Insurance Industry Global View

5

 

Top Technology Trends

5

North America

8

 

Snapshot

8

 

Global Trends

11

Europe

15

 

Snapshot

15

 

Global Trends

16

Asia-Pacific

19

 

Snapshot

19

 

Global Trends

21

Latin America

26

 

Snapshot

26

 

Global Trends

29

Rest of the World

34

Conclusion

35

Leveraging Celent’s Expertise

36

 

Support for Financial Institutions

36

 

Support for Vendors

36

Related Celent Research

37

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