Insurers have generally cut IT budgets over the past five years, due mostly to the economic downturn, but a comparatively brighter outlook now should spur growth in IT investments over the next five years with a particular focus on expanding digital channels, a research and consultancy firm says.
In a report, "Insurance Sector IT Priorities & Spending Forecast to 2017," Ovum says that "the steady improvement in written new business across most global markets means insurers are shifting from a primarily 'maintain as-is' stance toward a cautious re-investment in strategic IT projects."
Ovum says it expects insurance IT budgets to grow at 6.5 percent CAGR (compound average growth rate), for a total IT spend of over $108 billion, by 2017. Much of that growth will be seen in the life-insurance sector, Ovum says, as the global life industry suffered more than the property and casualty industry during the financial crisis and therefore saw deeper cuts to IT budgets during that time.
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