European insurers are set to spend 21.7bn euros (£15bn) on information technology this year, according to Celent Communications.
The report claimed that IT spend from the industry would also rise by an additional 600m euros (£423m) in 2004.
Celent analyst Axel Pierron said: "Despite decreases in overall IT budgets, European insurance companies are still pursuing new projects.
"Many carriers are taking a more industrial approach to gaining efficiencies. They will eventually integrate successful IT projects into all their lines of business."
