Property and casualty (P&C) insurers in the UK are expected to keep IT spending to a minimum over the next three years, an analyst says.
They are focusing on delivering shareholder value, by reducing costs and their exposure to risk, explains Datamonitor financial services technology analyst Charlotte Buckley.
She said: "In P&C, we envisage the cost pressures of the current environment continuing, and they [insurers] won't have the ability to embark on large scale projects."
She added that the main area for IT spending for most non-life insurers would probably be claims.
She said insurers would be looking to automate the claims process to increase its effectiveness and improve customer service.
A Datamonitor report on IT spending, written by Buckley, said P&C, or non-life, companies would probably limit their spending on IT to technologies that could "deliver demonstrable cost savings quickly".
Buckley said: "We see the overall growth in IT, in the P&C sector, to be a compound annual growth rate of 2.5% between 2001 and 2004, compared to nearly 5% for life and pensions."
P&C spending on IT in the UK, which was £1.4bn in 2001, is expected to rise to £1.5bn by 2004.
