Asia-Pacific IT budget to grow in 2012: Ovum

MELBOURNE, AUSTRALIA: Asia-Pacific insurers are planning to increase their IT budgets in 2011-2012, says research firm Ovum.

According to its report, 29 per cent of Asia-Pacific insurers expect that the IT budgets for both external and internal IT will significantly increase (at more than 6 per cent ) and that over 53 per cent are looking to increase IT budgets in 2011/2012, a 6 per cent increase on the 2010/2011 period.

Barry Rabkin, Ovum’s Insurance Technology Principal Analyst, said that coming out of the post-financial crisis economic situation, the Asia-Pacific region is in a growth mode.

“Although Asia-Pacific insurers are struggling with having more insurance business operating systems than they want, they are planning to increase IT budgets in 2012,” he added.

In addition to increasing their IT budgets, 51 per cent of Asia-Pacific insurers are comfortable using outsourcing such as business process outsourcing (BPO), and 56 per cent are using IT function outsourcing (ITO) for five of the 10 IT functions in the survey: network services, desktop management, IT security, applications development, and application management, the report added.

Rabkin added that the outsourcing vendors should also focus their efforts on the insurers that are uncomfortable using BPO or those planning to bring some processes back in-house.

In North America and EMEA, Asia-Pacifc insurers are more proactive in chasing the web 2.0 marketplace by choosing service-orientated architecture (SOA), software-as-a-service (SaaS), and rich Internet applications (RIAs), the report said.

“A region in growth mode, expanding IT budgets, and an increasing willingness to deploy newer technologies all add up to it being an exciting time to be an Asia-Pacific insurance company,” concluded Rabkin.