Insurance in the United Kingdom 2011: The CIO Perspective

by Catherine Stagg-Macey, February 22, 2011
Industry Trends
EMEA

Abstract

Growth and compliance with new regulations dominate the business agenda for insurers in the United Kingdom.

The recession that hit the world was not only strong but also very sudden. In less than a year, the UK annual GDP growth rate went down from nearly 2.7% to –4.9%. What followed were brutal trading conditions for UK PLC, and insurers had to adapt accordingly. The dark shadows of the recession have faded, and insurers are optimistic and focusing on growth in both sectors in 2011.

In a new report, Insurance in the United Kingdom 2011: The CIO Perspective, Celent looks the technology plans and priorities for UK insurers. This year sees a renewed and invigorated sector, with a goal of growing the business.

“If there is a single lesson for insurers from the recession, it’s the importance of an agile and flexible IT operation,” says Catherine Stagg-Macey, Senior Vice President with Celent’s Insurance group and author of the report. “This has to be in place to support a rapid response to unpredictable operating conditions. It’s not surprising to see the continued planned investment around core systems, specifically underwriting and product configuration.”

This report reviews in detail the current business trends facing the market for 2011, and how they are impacting IT investment. Key business themes are identified, and the broad IT investment plans and priorities for UK insurers are discussed. Details of budgets and IT spending, use of outsourcing, and interest in new and emerging technologies are also addressed in this report.

Trends and data discussed in this report reflect Celent’s experience of the market based on ongoing discussions with the industry and, specifically, deep interviews with 18 CIOs at the end of 2010 and beginning of 2011.

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally based analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is a wholly-owned subsidiary of Marsh & McLennan Companies [NYSE: MMC].

Media Contacts

North America
Michele Pace
mpace@celent.com
Tel: +1 212 345 1366

Europe (London)
Chris Williams
cwilliams@celent.com
Tel: +44 (0)782 448 3336

Asia (Tokyo)
Yumi Nagaoka
ynagaoka@celent.com
Tel.: +81 3 3500 3023

Table of Contents

Executive Summary

3

Introduction

4

Insurance Market Overview for the United Kingdom

5

Business Themes

10

IT Initiatives

14

Investment in Core Applications

17

IT Budgets and Spending

20

UK Insurance IT Spending Projections

22

Solvency II Preparation

23

Outsourcing

25

New and Emerging Technologies

26

Final Thoughts

27

Leveraging Celent’s Expertise

29

Related Celent Research

30

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