19 Jan Global Insurers seeking new technology to increase IT spend $101 billion
Insurers across the globe will spend more than $100 billion this year updating their systems for improved efficiency, better customer care management and connections to social media.
Insurers seeking new technology around the world will increase their cumulative IT spend in 2015 by 4.4 percent over 2014’s spending for a total of $101 billion by year’s end, according to a recent report from IDC.
Insurance companies will be looking for new and emerging technology tools to improve efficiency as legacy systems grow increasingly inflexible, complex and lack mobility and the ability to integrate with third party applications. Moreover, insurers will be looking to improve availability and access to systems.
“Insurers are further spending on change transformation and business optimization initiatives to augment productivity and support intermediaries, as well as in knowledge management, business analytics and customer relationship management applications to improve underwriting insights, raise customer centricity and intimacy,” said the IDC report. “Also critical is the need to enhance not just the intermediated distribution channels comprised of insurance agents, brokers and bancassurance, but also newer, disintermediated digital portals of the Internet, social platforms and mobile delivery.”
As insurance organizations modernize their technology systems, the cloud and mobility will likely play a key role for those that seek the efficiency advantage of anytime, any-device access to systems. Further, the cloud presents an opportunity to deploy a centrally coordinated portfolio of applications across locations and entities.
However IT departments often lack the resources and expertise to build and launch an in-house cloud platform that will be able to meet security, compliance and uptime requirements. Regulatory compliance is top concern for a heavily regulated industry such as insurance, whether it be HIPAA compliance or SOX compliance for publicly traded organizations. Naturally insurers seeking cloud solutions will outsource their cloud initiatives to providers who specialize in compliance.
Hosting providers that specialize in compliance-focused cloud solutions and the solution providers that partner with them will have the competitive advantage in professional services industries like insurance.