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Insurance companies are significantly ramping up their technology-related spending, including on artificial intelligence (AI), as the industry seeks to move towards the modern Cloud architecture to enhance the online experience of customers, employees, and distributors.
According to rough industry estimates, information technology (IT)-related expenses now account for nearly 10 per cent of the companies’ expenses.
In the last five years, IT spending by insurers has seen robust growth, driven by digital transformation initiatives of companies to meet evolving consumer demands.
The growth in tech investments is focused on modernising platforms and enhancing online customer experiences.
There has also been a marked rise in spending on AI and machine learning technologies for underwriting, claims processing, and customer service automation, industry experts said.
Industry insiders suggested that the integration of Internet of Things (IoT) technologies, particularly in telematics and health monitoring, has further increased tech spending of insurers to better assess risk and enhance service offerings.
The adoption of Cloud computing, they said, has prompted significant expenditures on Cloud infrastructure and services, improving scalability and flexibility.
Insurers are also investing more in advanced analytics tools to gain deeper insights into customer behavior and risk assessment.
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