Beijing, China
18 September 2007
Late
Development Advantage: IT Growth Trends at Small and Midsize Insurance
Companies in China
Report Published by Celent
Compared to large insurance companies,
small and midsize insurance companies have faster growth rates and invest
a higher proportion of funds in IT.
There is a huge discrepancy in the
shareholding structure and business scale of Chinese insurance companies.
Because Chinese insurance companies are at different phases of business
growth, the main motivation for IT construction and requirements varies.
In a new report, Late Development Advantage: IT Growth Trends at Small
and Midsize Insurance Companies in China, Celent compares trends in IT
application at small and medium insurance companies in China.
Growth in the Chinese insurance market in
recent years has increased companies' IT requirements. This report
analyzes new and emerging requirements by examining operational handling,
strategic expansion, sales and management, and the impact of these
requirements on the IT construction of small and medium insurance
companies.
Small and midsize insurance companies
generally do not have the burden of reforming old systems, so these
companies are able to operate on open platforms from their initial
incorporation. Some companies also adopt the model of centralized
operations. Small and medium insurance companies have experienced a late
development advantage, enabling them to better incorporate new technologies into their IT operations.
During the end of 2006 through the
beginning of 2007, Celent conducted a series of surveys with CIOs and CTOs
of small and midsize insurance companies. This report analyzes the results
of those surveys.
The small and midsize insurance companies
that participated in the survey invest an average of 3.38% of their gross
premiums on information technology. In 2007, an increase of 30.2% is
expected for IT investments compared with 2006 expenditures. In order to
meet the requirements for new functions brought about by rapid business
growth, small and midsize companies are projected to invest up to 65% on
new projects, which is much higher than their investment in maintenance
expenses.
"Large companies focus on
consolidating systems and resources that are distributed across different
subsidiaries to aid standardized management and a pooling of IT resources.
The IT construction of midsize insurance companies, however, requires an
increased number management-related projects. These companies are
exploring how to use IT to increase the quality of management and customer
service," said Wenli Yuan, author
of the report. "Recently established insurance companies seek to
improve the functions of existing systems and to develop new functions to
satisfy the requirements of business growth."
This report analyzes survey results in
the areas of investments in new projects, investments in maintenance
projects, operating platforms for the systems, comparative analysis of
J2EE and .NET, application of WebServices/SOA, composition of the
employees in IT departments, the likelihood of outsourcing various
operational and technological activities, and the evaluation of IT
companies by insurance companies. Celent hopes to assist small and midsize
insurance companies in formulating their strategic IT planning, while also
aiding IT companies in understanding IT growth trends within small and
midsize Chinese insurance companies.
The 40-page report includes 23 diagrams
and two tables. A table of contents is available
online.
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