MELBOURNE, AUSTRALIA: Asia-Pacific insurers are planning to increase their IT budgets in 2011-2012 thanks to the economic growth in the region, according to Ovum.
In its latest report, the independent technology analyst finds that 29 percent of Asia-Pacific insurers expect that the IT budgets for both external and internal IT will significantly increase (at more than 6 percent) and that over 53 percent are looking to increase IT budgets in 2011/2012, a 6 percent increase on the 2010/2011 period.
Barry Rabkin, Ovum’s Insurance Technology Principal Analyst, commented: “Coming out of the post-financial crisis economic situation, the Asia-Pacific region is in a growth mode. Although Asia-Pacific insurers are struggling with having more insurance business operating systems than they want, they are planning to increase IT budgets in 2012.”
In addition to increasing their IT budgets, 51 percent of Asia-Pacific insurers are comfortable using outsourcing such as business process outsourcing (BPO), and 56 percent are using IT function outsourcing (ITO) for five of the 10 IT functions in the survey: network services, desktop management, IT security, applications development, and application management. Compared to their peers in North America and EMEA, Asia-Pacifc insurers are more proactively chasing the web 2.0 marketplace by choosing service-orientated architecture (SOA), software-as-a-service (SaaS), and rich Internet applications (RIAs).
Rabkin added, “Outsourcing vendors should also focus their efforts on the insurers that are uncomfortable using BPO or those planning to bring some processes back in-house.”
Interestingly, for an industry slow to adopt new technologies, 43 percent of the Asia-Pacific insurers surveyed have deployed or are experimenting with private cloud. The same can be said for business intelligence (BI), where Asia-Pacific insurers are increasingly leveraging BI tools to target customer retention (86 percent rated this as the most important driver for BI usage).
“A region in growth mode, expanding IT budgets, and an increasing willingness to deploy newer technologies all add up to it being an exciting time to be an Asia-Pacific insurance company,” concluded Rabkin.