Total insurance IT spending across North America, Europe, andAsia-Pacific will grow to $140.2 billion in 2013, according toCelent, which represents an increase of 3.0 percent over 2012spending. The increase is slightly lower than the 3.5 percent ITspending growth increase experienced in 2012.

This slight shift is a cautious but encouraging indicator offuture growth, according to Celent, which released a new spendingstudy: IT Spending in Insurance: A Global Perspective.

European and North American financial institutions currentlyaccount for 73.2 percent of the global IT investments by insurancecompanies. Firms in the Asia-Pacific region account for20  percent, Latin America accounts for 3 percent, and theMiddle East / Africa / Commonwealth of Independent States accountfor the remaining 3.8 percent.

"Regional uncertainty in Europe is putting a damper on insurancepremiums and the resulting IT spending," says CatherineStagg-Macey, senior vice president with Celent's Insurance Groupand coauthor of the report. "North America has a respectable growthrate for the coming years, and the emerging markets continue toforecast very strong growth off a small base."

Key findings of the report include:

• Premium growth rates slowly climbed in 2011 and 2012 due to theprolonged economic and political challenges facing the globaleconomy. These global challenges caused insurers to continue theircautious and calculated IT investment paths. As a result, Celentspending estimates for 2013 are not much different than ourestimates for 2012.

• Although there are many ways to split the spending pie, themost telling indicator of future spending and growth relates toinvestments in new IT projects. Of the total investment in IT in2013, 57 percent will go towards maintenance. The percentage offunds dedicated to maintenance activities is high; it has slowlybeen coming down in some regions. However, percentage will remainfairly flat throughout the globe in 2015.
• Even though economic conditions and the financial crisis haveslowed spending on new investment, insurers are often runningsystems that are too slow and inflexible for their needs. Thesesystems are impediments to efficiency and product development.Slowly but surely, many insurers are becoming more aware and/orexperiencing the benefits of upgrading old technology, improvinginternal workflows and processes, and improving agent and userinteractions and investing in upgrading these older systems. Oncethey have made the decision to replace a new system, Celent expectsthat they will optimize the investment and "reuse" wherepossible.