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Insurers’ IT spending to hit $140.2 billion

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Global IT spending by insurance companies will reach $140.2 billion by the end of 2013, according to a new report.

Celent, a research advisory unit of the management consulting firm Oliver Wyman, New York, published this finding in an executive summary of a new report, “IT Spending in Insurance: A Global Perspective.”

The report reveals that European insurers currently spend the most on IT, closely followed by North American insurers. Insurers in Europe account for 36.8 percent of global IT spending, while North American insurers spend 36.4 percent. Insurers in the Asia-Pacific region account for 19.9 percent, Latin America 3 percent, and the rest of the world accounts for 3.8 percent.

By 2015, the report adds, North American insurers are expected to overtake European insurers and account for nearly 38 percent of global IT spending.

Among all regions, Latin American insurance companies will experience the fastest growth, boasting IT spending increases of 7.7 percent in 2013 and a compounded annual growth rate (CAGR) of 6.7 percent from 2013 to 2015. Total spending in Latin America is expected to reach $5.1 billion in 2015.

IT spending in North America, the report notes, will grow to $58.5 billion in 2015, a CAGR of 4.5 percent from 2013 to 2015. IT spending in Europe will climb to $53 billion in 2015, a CAGR of 0.9 percent from 2013 to 2015.

The Asia-Pacific is expected to growth at a modest rate (3.7 percent CAGR). Spending in the region, the survey adds, will grow to $31.1 billion in 2015.

Of the total investment in IT in 2012, Celent estimates that 54 percent was dedicated to maintenance of existing systems.