Insurance TelematicsUBI Solutions

UBI to drive insurance IT spending in US

Published: May 24, 2016 | Dublin, US

The insurance industry in the Americas is highly competitive and regulated in nature. The insurance market in the US is influenced by economic and political conditions of the country. GDP is one of the major factors that can influence the growth rate of the insurance industry. According to a new report by Research & Markets, IT Spending by Insurance in the US is expected to grow at a CAGR of 3.3% during the period 2016-2020.

Commenting on the report, an analyst from the research team said: “A current trend in the IT spending market is the intensification of cloud computing. The adoption of cloud computing solutions in the financial industry in the US has increased to implement flexible, scalable, and cost-effective IT solutions. Cloud-based solutions help insurance firms to decrease their total cost of ownership by reducing the upfront installation costs of IT systems. Firms subscribe to cloud-based solution to shift from on premise to SaaS-based deployment model. Insurance firms shift to cloud-based IT infrastructure model to increase flexibility in IT resource utilization and attain cost-effectiveness through pay per use pricing model.”

According to the report, a key growth driver is the popularity of usage-based insurance. Usage-based insurance (UBI), also known as pay as you drive, is an innovative insurance model deployed in the auto insurance industry. UBI policies require advanced communication systems, connected devices, and telematics solutions to monitor the behavior of vehicle drivers and accordingly calculate premium amounts. Software firms offer telematics, ICT, and IoT solutions for auto insurance firms to provide UBI policies. UBI policies integrated with analytics solutions help auto insurers to calculate premiums accurately by analyzing numerous factors such as vehicle speed, vehicle position, changes in acceleration, and mileage.

Some of the major key players in the IT Spending by Insurance in the US are-Accenture, CSC, Fiserv, Guidewire Software, and Oracle. On the other hand, there are more such players that are in trend right now including Andesa, Cognizant, EXL Service, FIS, Genpact, Majesco, Microsoft, Pegasystems, SAP, and StoneRiver.

Source: Research & Markets

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