Many Life Insurers Are Still Spending on Technology: Novarica

Most life insurers that care enough about technology to participate in Novarica surveys are maintaining or increasing their information technology budgets.

(Related: COVID-19 Promotes Acceleration of Everything Digital: Sun Life Exec)

Novarica — a Boston-based insurance technology research firm — has reported that finding in a summary of results from a recent survey of 135 large and midsize insurers.

Novarica released a little data from the survey to get insurers and others interested in buying the full report.

The sample included 16 midsize life and annuity issuers and 20 big life and annuity issuers.

All of the participating companies participate in Novarica’s own insurtech research council. Novarica polled them after the COVID-19 pandemic was already a force to reckon with.

When Novarica asked about IT budgets, 48% of the property and casualty insurers, and 66% of the life insurers, said they were sticking with, or expanding, their original IT spending plans.

Three of the midsize life insurers, or 19%, said they were increasing their IT budgets. Midsize life insurers were more likely to say they were increasing IT spending than any other group of survey participants.

Life Insurers’ IT World

Insurers are now more interested in sustainability than speed, and life insurers are working “to adjust to a completely virtualized business environment,” Novarica says.

Rob McIsaac, a Novarica executive vice president, wrote in a blog entry earlier this month that life insurers are planning to have to deal with both persistent low interest rates and high unemployment levels.

“The life insurance industry is also adapting to changes in face-to-face distribution channels and a likely sharp reduction in the use of paramedics to support fluid-based underwriting,” McIsaac wrote.

— Read Some Life Insurers Still Hate Their Claims Admin Systems, on ThinkAdvisor.

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