US, UK, and Canadian insurers are striving to digitize their entire businesses to enhance their customer experience and cut costs.
And overall IT/tech spend will begin climbing again from 2020 to 2024 across both insurance lines in all three countries. You can learn more in our Insurance Technology Spend Forecast.
Do you work in the Fintech industry? Get business insights on the latest tech innovations, market trends, and your competitors with data-driven research.
Global insurers have been rocked by large, unexpected payouts and falling revenues amid the coronavirus pandemic. Yet, property and casualty (P&C) and life insurers in leading markets will still increase their tech spend and accelerate their digital transformations in the next several years.
The global insurance industry’s drive to digitize is leading incumbent insurers in the US, UK, and Canada to grow IT/ tech spend volume.
Below, we outline the growth of US, UK, and Canadian P&C and life insurers’ IT/tech spend.
US IT/tech spend
US P&C insurers and life insurers’ expected tech spend growth rates dropped by 9.6 and 10 percentage points, respectively. US insurers slashed their digital innovation spend at a greater rate than their UK and Canadian counterparts due to higher investment in previous years and losses suffered in 2020.
UK IT/tech spend
UK life insurers ramped up tech investments by 11.4% between 2018-2019-almost double P&C insurers’ growth rate-and consequently their tech spend growth rates dipped more than their P&C counterparts amid pandemic disruption.
In reaction to large payouts, UK life insurers cut their expected tech spend growth rates by 8.3 percentage points between Q1 2019 and Q4 2020, at a sharper rate than the expected 4.7 percentage point decrease witnessed among P&C insurers.
Canada IT/tech spend
Between Q1 2019 and Q4 2020, the expected year over year (YoY) growth rates of Canadian P&C insurers tanked 8.3 percentage points. But in the same period, Canadian life insurers’ expected YoY growth rate proved the exception to the trend, jumping 7.0 percentage points from -4.9% in 2019 to 3.8% in 2020.
This anomaly is attributed to a planned moderation in tech spend in 2019, following higher levels in the preceding years. However, the scramble-to-adjust reaction of life insurers to pandemic disruption caused a pivot from this moderation and led tech spend to grow in 2020.
Future of IT/tech spend for insurers
The $6.3 trillion global insurance industry’s drive to digitize is leading incumbent insurers in the US, UK, and Canada to grow their IT and tech spend volume across insurance lines to power their digital transformations.
Insurers are looking to better meet customer expectations, cut costs, and adjust to widening coverage gaps via digital technology. And a multitude of internal and external factors – such as meeting rising digital customer expectations and addressing emerging risks, like climate change – will force incumbents to increase their tech expenses through 2024.
Want to learn more?
In the Insurance Technology Spend Forecast, Insider Intelligence forecasts the trajectory of US, UK, and Canadian P&C and life insurers’ IT/technology investment between 2020 and 2024 amid the competing pressures of incumbents’ digitization drives and the economic downturn caused by the pandemic.
Interested in getting the full report? Here’s how you can gain access:
Join other Insider Intelligence clients who receive this report, along with thousands of other Fintech forecasts, briefings, charts, and research reports to their inboxes. >> Become a ClientPurchase the individual report from our store. >> Buy The Report Here
Are you a current Insider Intelligence client? Log in and read the report here.