Two reports forecast strong IT spending growth within the insurance industry

Spending on IT within the insurance industry is expected to show strong growth over the next few years, according to two new reports.

The technology analyst Gartner has forecast that the market, which it estimates to be worth $186.7bn, will experience 3.8% annual compound growth through 2018. Meanwhile, insurance industry analyst Celent, which values the market at $162.1bn, claims there will be compound growth of 4.4% between 2014 and 2016. Both reports attributed improved forecasts to a more positive global economic outlook.

“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,” said Jamie Macgregor, senior vice president of Celent Insurance and co-author of the IT Spending in Insurance 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,” said Karen Monks, also co-author of the report and a Celent analyst. “Simply put, this means investing in technology to attract clients, retain clients, and maximise the underwriting result.”