Core replacement cycles are brewing and global insurers will spend US$8.2 billion on software and IT services for policy administration in 2015.
This is according to the new IDC MarketScape report from IDC Financial Insights, titled, ‘Worldwide Policy Administration Systems Vendor Assessment 2015’.
The report evaluates the capabilities and business strategies of 10 vendors offering policy administration systems (PAS) to IT buyers in the global insurance arena.
The vendors featured in this report are Accenture, CSC, EXL Service, Fadata, Guidewire Software, Majesco, Oracle, Sapiens International, StoneRiver and SunGard.
Insurers oftentimes find themselves constrained by archaic and inflexible policy administration systems when trying to optimise client acquisition and retention, create new or modify existing products, enhance business processes and claims management efficiencies, react quickly to evolving market opportunities, and simply fuel future growth, says IDC.
Consequently, IDC Financial Insights projects the global insurance sector spending US$8.2 billion on software and IT services for policy administration in 2015, with this figure expanding on a three-year compound annual growth rate (CAGR) of 4.6% through to 2018.
The specific areas currently driving investments within the policy administration arena include rating and quoting (especially to enable online channels), coverage and issuance of policy, policy and contract maintenance, billing and premium invoicing, as well as premium renewals.
A shift in consumer preference towards a digital mode of interaction is also encouraging insurers to invest on platforms that can support omni-channel delivery services.
According to Li-May Chew, IDC Financial Insights associate research director, “About 30% of projects keep within budgetary, time and scope requirements, and a meagre 33% of these eventually realise complete business benefits. It is thus critical that insurers pick their technology partners wisely.”
Positive trends observed across most of these vendors include aggressive investments for:
Data from this report indicates that challenges are more organisation-specific, though a few similar issues did surface. These are relevant to: