NU Online News Service, March 28, 2003, 12:51 p.m. EST – The insurance industry will spend about as much for information technology this year as it did in 2002, according to a new report from TowerGroup Inc., Needham, Mass.
The research firm estimates insurance IT budgets will increase at a rate of only 1% to 3%, compared with increases of 3% to 6% last year.
Jamie Bisker, the TowerGroup analyst who wrote the report, is blaming the tight budgets more on fierce competition than on the economic downturn, and he predicts that budgets will be tighter at life insurers than at property-casualty insurers.
“Life insurance has recently enjoyed larger IT budgets than other lines,” Bisker writes. “This correlates with the emphasis placed on the sale of financial products and the need for fast growth of modern distribution infrastructures to support increased sales activity.”