P/C Insurers’ Technology Spending Up 1.6%

Planned information technology (IT) spending by property/casualty insurance companies increased 1.6 percent from 2008 to 2009, according to researchers.

The planned increase in spending from 2009 to 2010 will only be around 0.2 percent. This slight increase is expected despite the fact that companies are on average predicting a decrease in revenue of 3.7 percent from 2008 to 2009.

The fourth annual IT spending study from the technology consulting firm, Gartner, and the insurer trade group, the Property Casualty Insurers Association of America, found that the planned IT spending increase was very close to Gartner’s prediction of 1.9 percent from last year. It is, however, sharply down from the 8.1 percent planned increase from 2007 to 2008.

The 22 PCI member companies that participated in the study average $400 million in revenue and 474 employees.

The companies said that 59 percent of IT spending is dedicated to “lights-on” support, while the remainder is dedicated to support business growth and transformation.

“This pattern of holding steady from 2008 indicates that even with a tough economy, these companies are still making some investment in the future,” said Eric Stegman, research director, Gartner.