A new report by independent market analyst Datamonitor has found signs that insurance carriers' use of technology vendor services is on the rise.

According to the report, "U.S. Insurance Technology Strategies," U.S. insurers will turn more and more to professional services providers and consultants to develop implement and manage complex technology 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 external products will grow by 6.5 percent in U.S. Life insurance, compared to 1.4 percent for internal IT. Non-Life external spending is expected to grow at an even faster clip, 7.2 percent, compared to just 2 percent on internal spending.

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