A new report by independent market analyst Datamonitor has foundsigns that insurance carriers' use of technology vendor services ison the rise.

According to the report, "U.S. Insurance Technology Strategies,"U.S. insurers will turn more and more to professional servicesproviders and consultants to develop implement and manage complextechnology projects. The report reveals that for the first time(year-end 2005), spending on external information technology (IT)products will outpace internal IT spending.

Through 2009, Datamonitor predicted that investment in externalproducts will grow by 6.5 percent in U.S. Life insurance, comparedto 1.4 percent for internal IT. Non-Life external spending isexpected to grow at an even faster clip, 7.2 percent, compared tojust 2 percent on internal spending.

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