Insurance companies are set to increase their global IT spend significantly in 2012, even though most are still reeling from the effects of the financial crisis.
This is according to a report by analyst Ovum, entitled Business Trends: Global Insurance Technology Investment Strategies.
"While the CIOs we surveyed had mixed feelings about their IT budgets in 2011, confidence in 2012 is much higher," said Barry Rabkin, Ovum insurance technology principal analyst.
"Some 47 per cent expect their IT budgets to increase, and some of these by significant amounts," he added.
Two thirds of the CIOs surveyed said they were most likely to invest in CRM systems, which Rabkin said "shows the industry is getting to grips with the need to understand customers better".
Also, almost half of insurance companies have experimented with private cloud computing since 2010, or plan to do so before 2012.
"The insurance industry has a justified reputation as one that is slow to adopt new technologies, so our survey findings are surprising and encouraging," said Rabkin.
"The fact that many have already begun to take the first steps in the private cloud computing arena shows that they have grasped the potential benefits it can bring."
However, despite increased investment and optimism for CRM and cloud, the insurance industry is still not comfortable with business process outsourcing (BPO).
Only half of the CIOs surveyed felt that BPO was an option, and Ovum suggests that vendors need to make offerings more compelling to the industry.
"For an industry that is fundamentally very traditional and slow-moving, adopting BPO requires a big shift in attitude," explained Rabkin.
"What our survey findings tell us is that outsourcing vendors are not doing enough to convince insurers that potential benefits such as cost savings make it worth taking the BPO plunge."
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