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Regulatory pressures drive insurers’ IT planning

Meeting regulatory requirements is the biggest influence on IT planning among general insurers in the Asia-Pacific region, according to research and advisory group Celent.

Growth and innovation has declined as a priority.

A survey of regional chief information officers shows many insurers plan to increase their IT budgets by about 3% this year.

About 57% of these insurers have IT budgets between 1% and 3% of direct written premium,

22% are at 4-6%, and 7% allocate more than 6% of direct written premium.

In the previous survey, no insurers allocated less than 1% of direct written premium to IT, but this year 14% do.

About 29% of IT budgets will be spent on staff, 20% on hardware and communications, and 51% on external software and services – up from 36% last year.

Digital change remains a leading priority for chief information officers, with 87% of respondents reporting projects under way, while 7% will start this year and 7% are in the planning phase.

Operational excellence is the second most important initiative, with 73% saying such programs are underway, 13% completed, 7% about to begin and 7% planning.

Artificial intelligence is attracting more interest, with 27% saying projects are under way, 20% to begin this year and 33% in planning.

About 63% of respondents are monitoring insurtech activities and offerings.

“As the property and casualty industry enters the second year of the insurtech era, the challenge of balancing the needs of incumbent systems on the one hand against possible disruptive technology on the other is becoming acute,” Celent says.

Surprisingly, innovation is not under consideration by 13% of the region’s insurance chief information officers.

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