Indian insurance companies would spend $1.8 billion on information technology (IT) products and services in 2012, an increase of 11.7 per cent over the expenditure of $1.6 billion in 2011, according to Gartner Inc. The forecast includes spending by insurers on internal IT, hardware, software, external IT services and telecommunications.
Telecommunications represents the biggest spending category, and expenditure on this is estimated to touch $566 million in 2012, up from $512 million in 2011. However, spending on IT services is expected to grow the fastest in 2012, with the expenditure standing at $447 million in 2012, a rise of 15.8 per cent compared with $386 million in 2011, according to the study.
Indian insurers are faced with an opportunity to transform significant aspects of their operations through technology, across the entire insurance business value chain.
“Indian insurers have shown they are particularly forward, with regard to considering alternative delivery models such as business process outsourcing,” said Derry Finkeldey, principal analyst, Gartner. “External factors, such as regulatory change, uncertain economic conditions and the increasing frequency of catastrophic events, are forcing insurers to reassess their approaches to business processes and the IT applications that enable them to derive greater efficiency and achieve more with less.”
“Insurers are looking for ways to streamline their processes, from the front office to the back office, and are investing in the next generation of core solutions to help them do that,” said Finkeldey. “These solutions often integrate business process management and analytics capabilities, or are offered in an ‘as a service’ model,” he said.
