Indian insurers to spend Rs10,100 crore on IT in 2013

Indian insurance companies will spend Rs10,100 crore on IT products and services in 2013, a rise of more than 9 per cent of the Rs 9,250 crore spent in 2012.

This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications, according to a report by Gartner.

According to the research and analyst firm, IT services has overtaken telecommunications to become the biggest spending segment, and is forecast to reach Rs 3,060 crore in 2013. This is an increase from Rs 2,700 crore posted in 2012.

IT services is achieving the highest growth rate amongst the top level IT spending segments, forecast to exceed 13 per cent in 2013, with growth of 23.4 per cent forecast for business process outsourcing services. Consulting is also a high growth segment with over 18.2 per cent in 2013.

''We are continuing to see Indian insurers lead the charge to outsourcing and business process outsourcing. The Indian insurance industry is experiencing huge growth in transaction volumes, and Indian consumers are quite progressive in terms of seeking online and mobile services,'' said Derry Finkeldey, principal analyst at Gartner.

''Insurers are turning to experienced IT vendors to help them navigate the inevitable complexity this is producing,'' Finkeldey said.

''The Indian domestic market for IT services is dynamic and highly competitive – with many of the leading names focused on the insurance sector and offering their own proprietary solutions for the industry. This competitiveness is ultimately great for insurance buyers,'' the analyst added.