Consumer demand for ‘anytime, anywhere’ interaction driving insurance IT spending

Insurance companies worldwide are cautiously shifting back to investing in IT projects, after cutting back following the economic downturn, according to new research from Ovum.

The firm said it is seeing a “re-emergence of IT projects focused on legacy system consolidation/transformation and replacement,” based on its analysis of non-life and life insurance IT spending between now and 2017.

“The irreversible shift in consumer power and consumers’ demands for ‘anywhere, anytime’ interaction  continue to drive significant IT investment in digital channels across all regional markets,” the report notes.

Overall, Ovum suggests that global insurance IT budgets will grow at 6.5% (compound annual growth rate), reaching a total of $108 billion by 2017.

Life insurers in Asia-Pacific are among the segment that will see the fastest growth (11% CAGR) according to the report, while the European life insurance sector will be slowest, expanding by 3.9% CAGR, Ovum says.

In North America, the focus will be on implementing “digital channels,” such as mobile and social media, and responding to new and changing regulatory requirements, according to Ovum.

Meanwhile, in Europe, the emphasis will be on reducing operating costs, which is leading to IT spending in modernizing legacy and fraud systems.