Industry IT Spending Profile 2007: Insurance

With the 2007 business environment for North American insurance carriers looking relatively good for the second year in a row, insurance carriers have become slightly more generous in their IT spending. We anticipate that IT spending in 2007 in the insurance industry will increase by 7%, compared with 5% growth in 2006. The highest priority will be efficiency, and the second highest, innovation. The initiatives to support these priorities are utility-oriented projects such as infrastructure consolidation and disaster recovery. However, competitive pressures and technology-enabled opportunities will drive the need for innovation in Internet and mobile applications as well as the replacement of legacy applications. Underpinning these changes will continue to be a drive toward service-oriented architecture (SOA) for internal integration of systems, usage of services firms for transformation, and greater focus on process standardization.