No firm estimates are available for the direction 2008 IT budgets will take, but Karen Pauli, senior analyst in the insurance practice at TowerGroup, believes record profits for the industry last year mean more money will be available for projects. "We don't think it's going to hit double digits [in IT spending growth] or anything like that, " she says, but " there's some money out there, which is pretty unusual."

By the time carriers get to 2008 budgeting, they either will be in the midst of or close to the end of the hurricane season. "Depending on what that does, you either are going to get some openings for carriers to spend some good money or everybody is going to go back to where we were two-and-a-half years ago–guarding the coffers because of the drain of the catastrophes," asserts Pauli. "However Mother Nature goes, that's going to make a difference."

There are many great software solutions in the marketplace today, Pauli comments, and the number of vendors in the market space has created a lot of competition. "If there are no major catastrophes [the rest of this year] and there is money to be spent, there certainly are lots of pain points for carriers with legacy systems that need to be fixed," she says.

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