Indian insurance companies are expected to spend around INR 12,100 crore (US$ 1.94 billion) on IT products and services in 2014, registering a 12 per cent growth over 2013. Segments like internal IT (including personnel), hardware, software, external IT services and telecommunications are expected to dominate the spending charts of insurance companies this year. Whilst IT services should remain the biggest spending segment at INR 4,000 crore in 2014, the software segment worth INR 1,200 crore (US$ 193.19 million) is expected to be the fastest external segment, growing at 18 per cent in the calendar year.
It is noteworthy that insurance companies are increasingly moving towards the IT based core insurance processes, especially to increase insurance penetration in the marketplace. Whilst the spending on internal IT services continues to increase, the sector took little time in shifting to competitive technology providers for guidance and delivery. The rising IT spending by Indian insurance companies is expected to result in better processes and improved service to the consumers, enabling the industry to raise the overall quality standards in the Indian insurance sector.