The French insurance market, which has been on a growth spurt,still has more potential despite some signs of slowing, accordingto a consulting firm report.

Boston-based Celent said France's insurance market, the fourthlargest in the world, has experienced an average growth rate of 8percent during the last five years.

French insurance companies, Celent said, have already adoptedinformation technology at a high level, but there are some domainswhere adjustments and initiatives could add value toorganizations.

Although expansion of the market is slowing, Celent reported,there remains potential for expanding the nation's premium percapita figure, which currently is just above $4,000, or 10 percentof the gross domestic product.

In the United Kingdom, it was noted the per capita figure isover $7,000 with a penetration of more than 15 percent. Celent saidit believes the French insurance market stagnation in 2007 is asign of a lower growth rate for the future, but the firm expectspremiums to resume their upward trend.

According to Celent, property and life insurance sectors in 2007accounted for EUR 196 billion ($290 billion) compared with EUR197billon ($291.5 billion) in 2006.

Life, which represents nearly 80 percent of the market,accounted for the decline, dropping from EUR154 billion ($228billion) to EUR152 billion ($225 billion).

The Celent report said average IT budget in terms of apercentage of premium is approximately 4.1 percent of gross writtenpremium, and this proportion is slightly higher in the lifebusiness (4.3 percent) in comparison to the non-life insurancesector (3.8 percent).

French insurers' IT spending, the report said, is slightlyhigher than the average European insurance company (3.4 percent).French insurers' IT budgets, it found, go mainly to maintenance (54percent) rather than new IT projects (46 percent).

Considering the market's weakening growth, IT budgets should notincrease drastically in the next five years, Celent projected. Thefirm said it expects the proportion of IT spending-versus-premiumto increase slightly, by 1 percent a year over the next five-yearperiod.

The report, "Insurance in France: Market and IT Overview," isavailable to Celent clients on a subscription basis.