Insurance firms’ technology budgets will continue to rise as many are in the middle of strategic transformations, according to an SMA report.
The 2016 Insurance Technology Priorities and Spending report found that those companies that are transforming or growing will increase their technology spending by 7% on average.
SMA said that data and analytics-related projects dominate the priorities for technology and tools oriented projects – with BI/analytics, data warehousing, predictive analytics, and big data included in the mix. The study added that IT security and cyber threat projects also continue to climb up the priority list.
“Modern core systems are essential to successfully compete in the digital era,” said Karen Furtado, co-author of the report. “The transformation plans for many insurers include core systems replacement and modernisation, as companies recognise the need for modern platforms, flexibility, and configurability to support a more dynamic, agile business.”
The report, based on a survey of 116 North American insurance business and technology, also claimed that the most important motivators for transformation are external to the industry. Monique Hesseling, SMA partner, said: “The prominence of customer expectations, emerging technologies and trends, and the increasingly digital world have caused many insurers to pursue more aggressive strategies.”