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Analyst Sees Tight IT Budgets

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NU Online News Service, Feb. 7, 2005, 3:34 p.m. EST

Life insurers may hold spending on computers, networks and related systems steady in 2005.[@@]

Budget growth of 2.5% to 10% at p-c insurers could help increase overall U.S. insurance IT spending to $36.4 billion this year, from $35.3 billion in 2004, but most life and annuity companies will be focusing on relatively short projects with a narrow scope, according to a forecast by Cindy Saccocia, a senior analyst at TowerGroup, Needham, Mass.

Some life and annuity companies that are willing to take on large-scale, “enterprise” projects may increase spending 5% to 15%, Saccocia writes in the forecast.

At most U.S. insurers, “IT spending will remain controlled and allocations will be limited to projects of 12 months in duration or less,” Saccocia writes.

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