Gartner Property Casualty Insurers Association of America.

This figure is well above the the 2009 figure from last year's survey that forecast a spending increase of just 0.2 percent. This year's survey predicts a revenue increase of 5.3 percent, which is in line with the 2009 figure.

"This study is the most comprehensive IT expense statistics study in the property and casualty industry," says Scott Joyner, vice president, information technology for PCI. "The 21 PCI member companies that participate in the study averaged $639 million in revenue and 511 employees."

Companies responded that for 2010, 63 percent of IT spending is dedicated to "lights-on" support, while the remainder of the IT investments are dedicated to support business growth and transformation. "This number is up slightly from 59 percent 2009 indicating that some of the spending increase may have been due to delayed maintenance" states Eric Stegman, research director, Gartner.

According to Kimberly Harris-Ferrante, a vice president and distinguished analyst with Gartner's insurance industry advisory service, "P&C insurers are still struggling with reducing operational costs and justifying the replacement of aging legacy systems. With rising costs of maintenance, it is imperative that companies begin a more aggressive approach to legacy replacement in order to shift IT spending to more strategic projects which will promote business growth and transformation."

Special Reports /

IT Spending for Property/Casualty Insurers Expected to Grow Substantially

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