Indian insurance companies will spend Rs 12,100 crore on IT products and services in 2014, a 12 per cent rise over 2013, according to Gartner Inc.
This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications.
The Rs 1,200-crore software segment is forecast to be the fastest external segment, growing at 18 per cent in 2014 overall, lifted by accelerated growth of insurance-specific software. IT services, the biggest spending segment for the insurance industry at Rs 4,000 crore in 2014, will continue to realise a robust growth of 16 per cent.
Category leaders are business process outsourcing (BPO) at 25 per cent and consulting – much of which relates to these insurance-specific application investments – at 21 per cent.
“Insurers in India are getting serious about their core insurance processes, especially where they help increase insurer penetration of the market,” said Derry Finkeldey, principal analyst at Gartner.
“While internal spending is also increasing, Indian insurers have been quick to turn to the competitive technology provider sector in India for guidance and delivery,” Finkeldey added.