Asia-Pac insurers seen to splurge US$18.1b on technology next year

That's 5.6% more than previous forays.

Acording to a releae, as global economies continue to mend gradually and insurance markets harden, IDC Financial Insights projects technology spending of Asian insurers rising in tandem.

Amongst others, IDC Financial Insights sees the necessity to - enhance operational flexibility and optimize on business process; innovate in product development and pricing; improve speed to market to stay competitive and dynamic; and keep pace with innovation and social phenomena in redesigning customer engagement strategies - leading to an intensified reliance on technology to achieve these goals.

It projects global technology investments rising to US$101.6 billion in 2014, based on a 4.0% compound annual growth rate (CAGR) over the forecast period of up to 2017.

"At the end of the day, as tighter coupling of technology with day-to-day businesses and operations sees IT becoming more intrinsic to an organization, budgets for technological deployments by insurers would need to rise," explains Li-May Chew, CFA, associate research director for IDC Financial Insights' Worldwide Insurance Advisory Service.

"Herein, the star performer continues to be the Asia/Pacific region, with an anticipated 5.6% rise in technology investments to US$18.1 billion in 2014, buoyed by countries in emerging Asia, such as China, India, Indonesia, and Malaysia."

"Our industry conversations in Asia/Pacific indicate that the top three most frequent areas of spending centers are around e-channel strategies for online, mobile, and possibly also social media; core applications development and management – for instance, for claims, policy administration, and product development; and for business analytics and CRM applications," remarks Chew.

"It is reassuring to note that Asian insurers increasingly comprehend that business-as-usual will no longer suffice and they need to transform to remain relevant to the game. Insurers are thus becoming more generous in allocating resources into technology, and this is resulting in investments around core applications as they replace installations that are reaching obsolescence, spend to expand their network of operations, or provide technology support as they enter into new markets or form collaborations with domestic incumbents."

More such revealing findings are shared in IDC Financial Insights' report “Global Insurance 2014 Top 10 Predictions: Future-Proofing the Business” (Doc #FIN244346, December 2013) on key insurance trends that are unfurling for the new year.

This was written to assist insurers with the task of future-proofing their businesses, and to allow financial technology vendors to more effectively prioritize their development activities and reposition offerings to ensure synergistic partnerships with these customers.

"We see insurance market leaders increasingly snapping out from years of conventionalism and inertia to future-proof operations," comments Chew.

"Getting their organizations future-ready mean needing to reinvent and simplify business processes to dramatically reduce cost; optimize on customer experiences with the assistance of analytics; enhance the digital outreach; play a more active role in risk modeling and assessment; and explore disruptive innovation within the mature markets such as Australia, Singapore, Hong Kong, Taiwan and South Korea."