Insurance sector embraces IT wholeheartedly, to spend INR101 bn this year

by Sharon Lobo    Jan 23, 2013

Insurance ITThe insurance sector is undoubtedly one of the most heavily regulated and highly competitive sector in the country today. Additionally, factors such as high attrition and cut-throat competition continue to plague this industry. However, over the years the insurance sector has viewed IT as a business enabler, so much so that Gartner foresees Indian insurance companies to spend 101 billion rupees on IT products and services in 2013. This forecast includes spending by insurers on internal IT (including personnel), hardware, software, external IT services and telecommunications.

However, the Indian insurance sectors’ perception of IT has a business enabler has been gradual as Insurance industry veteran and IndiaFirst insurance MD & CEO Dr. P. Nanadagopal explains, “Historically, the life insurance industry hasn’t covered itself in glory when it came to leveraging IT or using it innovatively, unlike other players in the financial sectors such as banks. The insurance industry for various reasons has always been IT shy.”

Dr. Nandagopal’s brainchild – MagicBoard, has taken IT’s role in the insurance industry to a whole new level. And he explains the reason for selecting this innovative solution, “We were a late entrant in the Indian insurance market. So, we needed to things differently than others to improve our market performance. And do so, we could have burned capital or used intelligent innovation and so we chose the latter.”

As the Indian insurance industry continues to experience huge growth in transaction volumes, and Indian consumers are quite progressive in terms of seeking online and mobile services. Insurers will gradually turn to experienced IT vendors to provide them with innovative solutions such as MagicBoard.

“We are continuing to see Indian insurers lead the charge to outsourcing and business process outsourcing,” said Derry Finkeldey, principal analyst at Gartner. “The Indian domestic market for IT services is dynamic and highly competitive – with many of the leading names focused on the insurance sector and offering their own proprietary solutions for the industry.”