Insurers plan to boost speed to market by upgrading internal systems

Insurers will increase spending on internal systems as they look to increase speed to market next year, a study by Novarica has found.

The research and advisory firm claims investments will focus on core systems and analytics, with business intelligence being the most active area for enhancement.

Core policy admin was found to be the number one area for replacement, however. It added that nearly 40% of insurers are currently engaged in or are planning a policy administration system replacement in 2015.

The study, which took place in the US, found that the dominant strategic goal of increased insurance IT spending was to support growth.

“Although most IT budget increases in 2015 will be modest, insurers are continuing to devote resources to expanding and improving capabilities,” said Matthew Josefowicz, managing director of Novarica.

“We are starting to see a disparity between insurers who are investing heavily in their core systems and embracing the possibilities offered by emerging technology areas, and those that continue to treat IT as a problem to be solved. We believe the former group will continue to have a competitive advantage over the latter in this information industry.”

The report added that the emerging technology areas of mobile, social, cloud and big data, will continue to emerge slowly. It said nearly half of insurers have some deployment of mobile or cloud capabilities, but fewer than 10% have done so extensively.