Tokyo, Japan
May 27, 2008

IT Spending Trends in the Japanese Insurance Industry

Report Published by Celent

IT investment in Japan's insurance sector is expected to reach JPY 757 billion by March 2008, and JPY 811 billion by March 2012, for a compound annual growth rate of 1.7%. 2012 will be a turning point in IT investment growth, after which a gradual slowdown will occur until spending reaches a steady level.

Japan's insurance market has become increasingly competitive over the past decade through the introduction of structural reforms as well as the infusion of foreign capital. The market has also undergone significant structural changes characterized by the emergence of Internet-based insurance sales and the introduction of third sector products in addition to conventional modes of life and non-life insurance.  

Budget constraints and a conservative approach to information technology have meant that the insurance industry has, until now, adopted a passive approach to IT investment. However, structural and regulatory reforms within the industry are compelling insurers to review their existing IT systems in order to make them strategically viable. Fortunately, a diverse array of vendor technologies and solutions are available to provide insurers with a suitable environment to meet future business strategies and challenges.

According to a new report, IT Spending Trends in the Japanese Insurance Industry, Japan's insurance market looks set to move ahead with the digitization of paper-based information, automation of payment processing, and adoption of workflow tools and content management systems in tandem with revisions of claim and policy administration systems.

Insurance companies have invested heavily in numerous products that support market demands, but have not effectively supported them. Carriers face barriers such as consolidating product lines, creating a strategic approach to wealth management, and complying with J-SOX.

“Both life and non-life insurers are now at the stage where they are revising their future business model strategies. With the melee of the third sector due to life and non-life products flooding the market, insurers must provide customers with the right information and responses in order to remain viable,” says Yumiko Manchu, an analyst at Celent and author of the report.

“The recent deregulation of over-the-counter bancassurance presents insurance companies with a powerful sales channel, one which will likely see healthy investment in technology as a result of the need for adequate support in order to realize long-term business opportunities.”

This report examines the business environment surrounding the domestic insurance industry in Japan. It looks at IT spending areas in the insurance industry and forecasts future trends.

The 25-page report contains 16 figures and 2 tables. A table of contents is available online.

 

Members of Celent's Life/Health Insurance and  Property/Casualty Insurance research services can download the report electronically by clicking on the icon to the left.  Non-members should contact info@celent.com for more information.

 

About Celent

Celent is a research and advisory firm dedicated to helping financial institutions formulate comprehensive business and technology strategies. Celent publishes reports identifying trends and best practices in financial services technology and conducts consulting engagements for financial institutions looking to use technology to enhance existing business processes or launch new business strategies. With a team of internationally experienced analysts, Celent is uniquely positioned to offer strategic advice and market insights on a global basis. Celent is a member of the Oliver Wyman Group, which is part of Marsh & McLennan Companies [NYSE: MMC].

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