India will see continued explosive growth in the insurance market, with IT spending growing to over $9 billion by 2012. Insurers must now invest in people, processes, and technology in order to remain competitive.
In a new report, Insurance in India: Market and IT Overview, Celent discusses key drivers in the insurance market and how insurers should be positioning their IT to take on these challenges. The country has experienced unprecedented economic rates of growth in the past decade, and the insurance industry has seen a 25% increase in premium income over 2005.
For the insurer, the challenge is all about scale and skills. The company board must be clear about growth plans and overall business strategy if IT is to be supportive in the future. With these plans in mind, CIOs will need to make significant investments in people, processes, and technology. IT providers will have to come to terms with the issue of scale quickly to be at the forefront of what could become a very competitive marketplace for IT services.
Celent estimates IT spending in 2008 will top US$3 billion. The largest proportion of IT spending is within the life insurance sector, reflecting both the enormous size of this sector and higher overall IT spending. Growth in IT spending will match the increase in premium growth expected in the coming years. Celent estimates IT spending will grow to over US$9 billion by 2012.
"India is emerging as one of the most important players in the world economy," notes co-author and insurance senior analyst Catherine Stagg-Macey.
"This is a nation only just beginning to tap its enormous potential," adds co-author Ashley Evans, "and India stands poised to become a giant in the world economy, perhaps even a serious rival to the US and China."
This report looks in more detail at the size and structure of the Indian insurance market and discusses salient IT trends.