IT Spending Trends in the Japanese Insurance Industry: 2011

by Neil Katkov, PhD,  KyongSun Kong, August 11, 2011
Industry Trends
Asia-Pacific

Abstract

In March, Japan was rocked by one of the largest earthquakes on record. Despite the massive scale of the Great East Japan Earthquake, the insurance industry has weathered the disaster well. Celent forecasts that insurance IT investments will grow from 7.84 billion USD in the fiscal year ended March 2011 to reach 7.98 billion USD in the fiscal year ending March 2015.

In this new report, IT Spending Trends in the Japanese Insurance Industry: 2011, Celent offers an in-depth analysis of IT investments based on trends in the industry. This report takes into account the recent disaster while offering a comprehensive analysis of Japan’s insurance industry. Celent forecasts that information technology spending for the year ending March 2012 will decline marginally before rebounding to enjoy moderate growth. For the fiscal year ending March 2010 through the fiscal year ending March 2015 Celent expects a compound annual growth rate (CAGR) of approximately 0.38% as IT spending in Japan’s insurance industry trends largely sideways.

“The March 11 earthquake will accelerate change in a number of areas, including prompting the industry to revisit business continuity planning (BCP) and reconsider the adoption of green IT,” says KyongSun Kong, Analyst with Celent's Asian Financial Services Group and author of the report. “In terms of the latter, the disaster will spur companies that have been dragging their feet to study the introduction of technologies such as cloud computing and SaaS solutions.”

In this report, Celent scrutinizes the current state and future prospects for Japan’s insurance industry, offering analysis of IT trends as well as proposals to help insurance companies and vendors to formulate profitable strategies for the future. 

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 part of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America (Boston)
Tylor Tourville
ttourville@celent.com
Tel.: +1 617 424 3284

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)208 870 7875

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81.3.3500.3023

Table of Contents

Executive Summary

3

Definition of IT Spending

5

Market Overview

7

 

Insurance Industry Response to the Disaster

7

 

Insurance Premium Revenue Trends

8

 

Trends by Insurance Sector

11

Sectors Expected to Grow

14

 

Direct Channel Growth

14

 

Product Customization

14

 

Earthquake and Fire Insurance Under Review

15

 

Growth of Third Sector Products

16

 

Promoting a Shift to Paper Free Operations

16

IT Strategies: Entering a New Phase

17

 

BCF Under Review

17

 

Interest in Green Technologies and Cloud Computing

18

 

Embracing Sales Channel Tool Functions

18

 

Embracing Security

18

 

Investments in Overseas Branch Systems and Locally Incorporated Operations

18

 

Adoption of Shared Systems

19

 

Introduction of External Package Software Solutions

19

IT Spending Trends in Japan’s Insurance Industry

20

Conclusions

29

 

Proposals for Insurance Companies

29

 

Proposals for Vendors

29

Leveraging Celent’s Expertise

31

 

Support for Financial Institutions

31

 

Support for Vendors

31

Related Celent Research

32

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