New hardware and software for insurance companies can come with big price tags. But new research shows that the companies spend nearly twice as much on existing IT equipment than on new solutions.
Novarica, a research and advisory firm specializing in insurance technology strategy, unveils this finding in a 2015 benchmarking report. Based on 69 responses from the Novarica Insurance Technology Research Council, the study highlights key issues to consider when benchmarking.
The report reveals that insurers spend on average 20 percent of their information technology budgets on maintenance fees for IT solutions they own. This compares to 11 percent for new hardware and software. (See chart below)
The largest percentage of their IT budgets (41 percent) is allocated to internal IT staff. An additional 9 percent is spent on other IT-related needs.