IT spending in the insurance industry will not slow in 2012,according a new study published by Novarica, a research andadvisory firm focused on technology strategy in insurance andfinancial services.

Novarica's 26-page report, US Insurer IT Budgets andPlanning for 2012, is based on a survey of CIOs and equivalentexecutives from 132 U.S. insurers. The majority of insurers expectto increase their IT budgets slightly in 2012, according toNovarica, as they continue to focus on delivering businesscapabilities to support growth, increase competitive parity, andimprove operational effectiveness.

“Insurers have a clear-eyed self-assessment of the state oftheir internal systems,” says Matt Josefowicz, partner and managingdirector of Novarica and author of the report. “On average,insurers rate nearly half of their systems below 'acceptable.' It'sthe need to improve these capabilities rather than external factorslike the economic recession and compliance pressures that are theprimary drivers for most insurers' IT budgets and plans.”

Other findings from the report include:

• More than one-third of insurers are either in the middle of acore policy administration system replacement, or planning one for2012. Claims systems and billing systems have similar levels ofactivity.

• While agent and customer portals and business intelligencesystems are less likely to be replaced, nearly half of insurers areplanning replacements or major enhancements in these areas.

• Mobile, tablets, social media, and cloud are still primarilyin limited deployment or pilot programs for most insurers, wherethey are deployed at all. While there is significant plannedactivity in these areas, most of these are ancillary to the majorstrategic projects that consume IT budgets and managementbandwidth.

A four-page extract of the report is available online.The full report can be purchased there as well.