Figure of the day: SITS spending in the Austrian insurance sector
Austria’s insurance sector has not been hit as hard by the disruption from Covid-19 as other industry sectors. However, there are clear signs that the country’s leading carriers, brokers, and institutions are set to accelerate the transformation that had already been gathering momentum before the pandemic struck. Like many areas of the Austrian economy, insurers had to adapt their working methods to support more work from home. Investments in digital transformation across the sector were made in the context of a renewed need to drive cost savings.
Reducing operating costs and increasing operational efficiency was certainly a top short-term priority for most insurance companies. The current crisis, but also the general competitive situation in the sector – including competition from new, innovative players, InsurTechs – are driving the need to increase operational efficiency. This might be bad news for those IT providers that are not positioned in strategic business areas and that are not in the cost-cutting game. But we expect companies to invest in IT that allows for a reduction in operating costs through innovative concepts, and in ways to further optimize and modernize their legacy IT architectures and bring down costs.
According to PAC's estimates, total SITS spending in the Austrian insurance sector is expected to grow by 3.5% in 2021 and by 4.6% in 2022 .
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