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.
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.
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