Indian insurance companies will spend Rs 121 billion on IT products and services in 2014, a 12 percent increase over 2013, said Gartner.
This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications.
The Rs 12 billion software segment is forecast to be the fastest external segment, growing at 18 percent in 2014 overall, lifted by accelerated growth of insurance-specific software.
IT services, the biggest spending segment for the insurance industry at Rs 40 billion in 2014, will continue to realize robust growth of 16 percent. Category leaders are business process outsourcing (BPO) at 25 percent and consulting – much of which relates to these insurance-specific application investments – at 21 percent.
“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.”