MILAN, Italy, and FRAMINGHAM, Mass. - October 25, 2005 - Global independent
research and advisory firm Financial Insights, an IDC company, today announced the release of a new study, which provides a detailed view of vertical- specific applications in the Western European insurance sector, based on Financial Insights and IDC's European Vertical Market Survey, conducted in the top 5 Western European countries (France, Germany, Italy, the United Kingdom, and Spain) during March/April 2005.
Because industry-specific applications are vital for the insurance sector, it is essential to understand which trends and developments are going to shape the market in the short term. According to Angela Vacca, senior research analyst for Financial Insights' European IT Opportunity: Financial Services research, "Insurance institutions are moving toward a more intensive use of industry-specific applications because they need to compete in an increasingly commoditized market. In this context, IT solutions developed for the specificities of the industry will be a strong option to create a differentiated offering. In addition, the need for IT simplification and for achieving a more dynamic approach to technological and business changes will make it compelling to look for best-of-breed components."
According to this survey findings, two-thirds of surveyed companies are starting or continuing to invest in vertical solutions. In particular, claims management and process and document management are areas in which the investment priority is higher. However, competition is growing, and several IT vendors are targeting the insurance sector with industry-specific solutions. Developing the most powerful value proposition is key to success.
Survey data highlights that insurance companies investing in solutions developed for their industry choose best-in-class components from different suppliers more than an integrated approach that involves a single IT vendor. This means that IT vendors that want to target this market have to invest in technology innovation to create suitable solutions: Insurance companies are struggling to increase their efficiency level and are therefore going to carefully evaluate every investment.
Real market opportunities for IT vendors will reside in those functional areas in which the investment priority is high and the budget allocation is effective. In the short term, claims management, risk management, and policy administration seem to offer the right combination of high priority and strong commitment to become real addressable markets for the IT industry.
The Financial Insights study, Western European Insurance Sector, 2005: Industry-Specific IT Solutions Adoption and Investment Plans: A Financial Insights Survey, by Angela Vacca (Financial Insights #FIN1661, September 2005), shows the priorities and strategies of Western European insurance companies in the adoption of insurance-specific applications. The first part of the study outlines the current situation, providing data on the present adoption of vertical-specific applications. The second part focuses on future evolutions and changes.
In more detail, this study provides data on:
Â· Diffusion of insurance-specific applications
Â· IT functional areas in which insurance companies are focusing their investments
Â· Use of build or buy strategies
Â· Application type in use and planned for use