Global information technology spending by insurance companies is expected to reach US$140.6 billion in 2012, an increase of 6.3% over 2011. This figure is substantially higher than the 1.1% decline in growth experienced in 2011. Celent expects global spending on IT products and services to grow to US$157.5 billion by 2014, a 5.8% CAGR from 2012 to 2014.
In a new report, IT Spending in Insurance: A Global Perspective, Celent analyzes IT spending trends across different regions (North America, Europe, the Asia-Pacific region, Latin America, and "rest of the world" grouped as one region). The report compares and contrasts the direction of IT spending trends among regions across the world.
European and North American financial institutions account for 75% of the global IT investments by insurance companies. Firms in Asia-Pacific account for 19%, Latin American firms for 3%, and firms in the rest of the world account for the remaining 3%.
"The overall spending picture looks upbeat," noted Catherine Stagg-Macey, Senior Vice President and one of the report's authors. "The explosion in investment in Latin America really masks a more benign growth in Europe. No one can forecast how the regional economic issues will unfold in 2012, and these growth figures may look very different in 2013."
Among all regions, the fastest growth will be seen in insurance companies in Latin America, with IT spending increasing at 22% in 2012. Growth will continue in this region, and total spending in Latin America is expected to reach US$6.2 billion in 2014. North America will experience climbing growth rates through 2014, while Europe will struggle. IT spending in North America will climb to US$58.6 billion in 2014, a CAGR of 7.6% from 2012 to 2014. IT spending in Europe will climb to US$56.4 billion in 2014, a CAGR of 2.2% from 2012 to 2014. Asia-Pacific is expected to grow at a relatively modest rate (6.1% CAGR). Spending in this region will grow to US$29.6 billion in 2014.