With the recent stock market volatility and growing concern about national debts around the globe, it is hard to fault anyone for riding out the storm by keeping a little extra capital around in case things — somehow — get worse. But not all insurance companies are comfortable standing pat. When it comes to IT, in fact, nearly half of all insurers plan to increase their budgets.
“While the CIOs we surveyed had mixed feelings about their IT budgets in 2011, confidence for 2012 is much higher,” said Barry Rabkin of Ovum insurance technology, in its “Global Insurance Technology Investment Strategies” report. “Forty-seven percent expect their IT budgets to increase — and some by significant amounts.”
Perhaps one source of the spending uptick is the cloud. Almost half of insurers have either already “experimented” with cloud computing in the past year or plan to do so in the near future. One concern among those that are not jumping on board are that the vendors who provide the service have not convinced them that the benefits (lower cost storage, quicker data restoration after a disaster, less internal IT maintenance staff required), outweigh the risks, which include granting access of sensitive info to a third party, data breaches, regulatory compliance and the long-term solvency of the company managing the data.