Business Focus is a weekly column providing at-a-glance
statistics and commentary on spending priorities and trends in
particular sectors. This week we look at the general insurance
sector.
Large general insurance firms spend slightly more than the
UK-wide average on IT, investing £10,025 per desktop each year,
compared with an all-industry figure of £8,455 for larger firms.
But among small and medium sized enterprises the figure is on a par
with the UK average for smaller firms, at £3,124 per desktop.
Insurers have long had a reputation in the financial services
sector for being slow to embrace technology, and the numbers appear
to bear this out.
General insurers' spending on IT is similar to levels in the
life insurance market, but it is well down on the IT investment
made in other areas of financial services, including retail
banking, where the typical per-desktop spend is about 50%
higher.
Having said that, the investment being made is still
substantial, with insurers investing in improving and automating
many of their core quotation and policy-creation engines and in
claims handling processes.
The figures show that spending on IT services among larger
insurers is well above the UK average, which suggests that many
routine processes are not viewed by insurers as points of
competitive differentiation and are suitable for outsourcing.
Methodology
The analysis is based on Computer Weekly's database of more than
60,000 IT budget holders, twice yearly user IT expenditure surveys,
CBI/Kew senior executive surveys, government surveys, government
demographic data, HM Treasury economic forecasts and Cambridge
Econometrics industry sector forecasts.
Further details
www.kewassociates.co.uk
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