The insurance market analyst claims the industry has been experiencing a period of technological change over the last five years - with companies either replacing or modernising key systems such as claims, billing or policy management software.
The Insurer Technology Spending report claimed this wave of adoption had previously been driven by a need to update legacy systems, which were restricting firms, but motivation behind new deployments had evolved. It claimed companies are looking to their core systems to enable further innovation.
“There are more insurers that are now viewing core replacement as an opportunity to position for the future – to build a foundation for a more agile company, one that can respond to market needs, capitalise on innovation, and leverage technologies such as mobile, analytics, and cloud computing,” said Mark Breading, partner at SMA.
“Certainly, the priorities and investments are different by line of business and insurer size. And each company has its own unique set of circumstances and strategies. But the big themes are unmistakable – we are in the midst of an era of change in the insurance industry, and technology is a vital enabler of that change.”
The SMA report added that it expected insurers to increase their technology spending levels by an average of 3% this year with even greater increases happening between 2015 and 2017.