IDC Financial Insights projects that insurers in Asia/Pacific will increase technology spending by 8% to $18.2 billion in 2013, meaning that they would boast the most aggressive YoY technology spending as buoyed by emerging countries in Asia.
European countries will command the biggest part with 40.5% of the total global spending on 1.7% growth while North American insurers are expected to account for 37.3% on a muted 2% YoY growth.
IDC Financial Insights also suggest strategic investments to add value to their bottom line. These include activities to improve customer experience and enhance relationships in order to attract and retain policyholders; services and investment to boost financial advisors and agents’ productivity and allegiance; expansion to specialty insurance; and adoption of analytical application and data technologies.
According to Li-May, CFA associate research director for IDC Financial Insights’ World Insurance Advisory Service, much has been changed. The low interest rate and faltering global expansion reduces investments yields and undermines profit, driving insurers to expand to other continents to support profitable growth.
This results to concerted efforts using online technology through mobile initiatives and social media. Thus, a rise of 3.1% in insurance technology spending is to be expected in 2013 with investments, focusing on analytics and CRM, core applications, process and enterprise management tools, channel management, and compliance and risk management.
She also believed that even though insurance is the most traditional sector in financial services, it still needs to improve itself in order to develop new growth opportunities by pursuing innovative technologies around telematical apps and social media.
- APAC insurers will increase technology spending by 8% amounting to $18.2 billion in 2013
- Investments that will be made by global insurers will rise only 3.1% YoY in 2013 amounting to $110.7 billion
- European insurers account for 40.5% of global spending at 1.7% growth
- North American numbers: 37.3 of global spending at 2% YoY growth
Li-May Chew, IDC Financial Insights’ Worldwide Insurance Advisory Service, CFA, Associate Research Director: “With increased volatility and complexity, the markets have fundamentally changed, and one cannot expect the future to resemble the recent past. Businesses might be hard pressed to return to the normal ‘business as usual’ mode, and as a result, insurers will have to react by responding more quickly to both opportunities and threats.”