Global insurers are expected to increase annual IT spending by 4.4% to almost $101 billion in 2015 with rigorous investments in technologies to boost efficiencies and innovation, according to IDC- and application modernization is priority #1. Geographically, the emerging markets continue to shine, said Li-May Chew, global lead for IDC Financial Insights’ Worldwide Insurance Advisory Service.
Chew sees investments centering around core system modernization and management such as data warehousing, claims and policy administration systems.
Insurers are further spending on change transformation and business optimization initiatives to augment productivity and support intermediaries, as well as in knowledge management, business analytics and customer relationship management applications to improve underwriting insights, raise customer centricity and intimacy.
Also critical is the need to enhance not just the intermediated distribution channels comprised of insurance agents, brokers and bancassurance, but also newer, disintermediated digital portals of the internet, social platforms and mobile delivery.
IDC Financial Insights has also drawn up the following predictions for 2015.
- First, application modernization will gather momentum with zero-tolerance for infrastructure failure and demand for reliability and availability, driving the adoption of modular approaches to upgrades and replacements.
- Second, insurers will be under pressure to enhance processes efficiencies and reduce cost for core operational functions such as policy administration, underwriting, and claims performance.
Application modernization is hand-in-hand with big data analytics to transition core systems to predictive and even prescriptive capabilities, serving to create data-driven insights and enhance propositions to customers.