European Insurance companies plan to cut spending on internal IT staff, systems integration and professional services over the next five years but they will spend much more on packaged software and outsourcing, according to researchers Datamonitor. Insurance companies spent nearly $16bn on IT products and services in Europe in 1998, and Datamonitor expects that this will rise to nearly $18bn in 2003, a compound annual growth rate of 2.2%. Many will try to cut costs through outsourcing – hence spending in this area is expected to grow from $698m to $1.46bn, an annual growth rate of 15.8%. Fifty European insurers surveyed by Datamonitor said the most important attribute for outsourcing companies was experience in the insurance sector.
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