We expect Insurers’ spending on Actuarial Systems to increase along with life premium & annuity deposit growth. As insurers purchase new actuarial systems, we expect several factors to influence their purchasing decision:
Regulatory compliance will continue to drive investment. New Actuarial Systems will support more complex standards like Principles-Based Reserving and Solvency II to keep up with the changing regulatory environment.
Technology improvements will smooth operations. Insurers will increasingly use high performance computing (HPC) platforms and GPU software, allowing them to operate with more speed and agility.
Insurers will choose sourcing to generate savings. Sourcing and other professional service support functions (e.g. actuarial technicians and analysts) will become more important, generating savings for insurance carriers’ international spending.
While our estimates put the compound annual growth rate of Actuarial Systems spending at a modest 2% annually from 2012-2016. Spending in Actuarial Systems is expected to grow at the fastest annual compound rate, 4.7%, in the Middle East and Africa. We estimate spending to increase from $137 million in 2011 to $172 million in 2016.
These Actuarial Systems estimates are part of a larger initiative, TechSpend, a partner product with our Actuarial Systems Technology Analysis. Each provide a comprehensive understanding of the current market, future spending, and the vendors providing technology solutions in the space.
We encourage Insurers to use our diagnostic anatomy to measure those components most important to a technology investment decision, including risk reduction, regulatory compliance, and high performance computing. To compare Actuarial Systems, we evaluate each product against our diagnostic anatomy.
Insurers can learn more about the key elements driving an investment decision for Actuarial Systems with our Diagnostic Anatomy. CEB insurance TowerGroup members can also download TechSpend: Life & Annuity Actuarial Systems.