Life Insurance Industry Plans to Increase IT Budget in 2011, Finds LOMA Resource and SMA Survey
ATLANTA, Nov. 11 , 2010 /PRNewswire/ -- Ninety-one percent of executives for life insurance companies in North America plan to increase or hold steady their IT budgets in 2011, according to a survey conducted by LOMA and SMA Strategy Meets Action (SMA).
This report, Riding the Wave: Insurer Technology Spending, Drivers, and Approaches, focuses on the technology spending trends among life and annuity insurers in North America. It analyzes where insures are spending money and what is driving technology investment decisions. The study examined insurers by tier, uncovering significant differences in business drivers, IT spending patterns and development philosophies based on organizational characteristics. It is part of a series of studies conducted by SMA to examine the insurance ecosystem and investigate the alignment of technology spending and solutions.
"The study is consistent with what we are hearing from our members," said Jeff Hasty, FLMI, ACS, senior vice president of LOMA. "Information technology will continue to play a key role for insurers, with more IT spending shifting to the strategic use of technology to better understand customers and markets, improve products and increase cross-selling and up-selling opportunities."
The survey found that the 79 percent of executives say their companies are growing or are in the process of transforming the business. SMA analysis points to a slightly increasing rate of spending, despite the pressure on insurers to control budgets and significant financial challenges in some areas of the business.
"As the life and annuities industry emerges from this difficult period, many companies are positioning for the next wave of growth," notes Mark Breading, SMA Partner. "Over the past two years, insurers have taken a conservative approach to the business, working to strengthen their capital position, contain exposure to certain risks and minimize their expense base. SMA analysis indicates that while insurers are optimistic about growth opportunities, most think it prudent to expand IT investments with a measured pace, at least in the short term."
The full report, part of SMA's Life and Annuities Insurance Ecosystem Research Series, is available through SMA at www.strategymeetsaction.com. A summary of the findings is published in the November issue of LOMA's Resource magazine. The complete article appears in the Resource section of the LOMA Web site, www.loma.org.
Established in 1924, with 1,200 plus member companies in over 80 countries, LOMA is committed to a business partnership with its world-wide members in the insurance and financial services industry to improve their management and operations through quality employee development, research, information sharing, and related products and services. To find out more about LOMA and the learning opportunities it offers, visit LOMA's Web site at www.loma.org.
Exclusively serving the insurance industry, Strategy Meets Action (SMA) blends unbiased research findings with expertise and experience to deliver business and technology insights, research, and advice to insurers and IT solution providers. By leveraging best practices from both the management consulting and research advisory disciplines, SMA's services are actionable, business-driven and research-based – where strategy meets action – enabling companies to achieve business success. Visit www.strategymeetsaction.com for more information about SMA, or contact the author, Mark Breading at firstname.lastname@example.org.