IT spending by the insurance industry in the Asia-Pacific (excluding Japan) region is estimated to grow from $3.2 billion in 2007 to reach $5 billion in 2011, with a compounded annual growth rate of 11.5 per cent over the same period, according to a new Springboard Research report.
Australia leads the market with a 30 per cent share and, combined with the other top five regional market leaders — China, Korea, India and Taiwan — represents an overwhelming 86 per cent of the regional market opportunity in the insurance vertical.
“After having relied on traditional ways of doing business for so long, insurance companies across the region are now embracing IT in a big way and are looking for new ways to reach out to their customers,” said Nilotpal Chakravarti, senior analyst of vertical markets, Springboard Research.
Springboard’s latest report further showed that in terms of overall spending, industry-specific solutions dominate IT budgets of insurance companies and include applications for claims management, policy administration, underwriting and sales.
| THIRD BASE Australia is the leader in IT spending by the insurance industry with a market share of 30 per cent Sales remain APAC insurers’ top strategic focus area |
Additionally, sales remain APAC insurers’ top strategic focus area and accordingly CRM is slated to be an important focus area for IT investments in the coming year.
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The key IT spending trends prevailing in APAC’s insurance sector are a growing focus on the web, development of in-house solutions, adoption of SOA and investments in telecom and networking, particularly in voice and video over IP solutions to cut down communication costs.
“Industry-specific solutions are the main focus of IT deployments by insurance companies in the region,” Chakravarti said, adding, “While developed markets such as Australia, Singapore, Hong Kong and Korea have been spending more on services, in developing, fast-growth markets like China and India, a hardware build-out is still taking place to develop the base infrastructure for many insurance companies.”