Kathmandu. The insurance industry is expected to see the largest increase in information technology (IT) budget spending this year as financial institutions enter the 2026 fiscal year with competing technology priorities.
According to global data company Celant, the largest IT budget growth is expected to be 13.8% in life and health insurance and 12.9% in property and casualty insurance. These figures are significantly higher than the financial industry average of 7%.
Celent analysts attribute this growth to the shift from small-scale experiments to full implementation of new tools. Insurers are now focusing on generative AI, automated risk monitoring and replacing older, legacy computer systems that previously delayed operations.
Aggressive spending in the insurance sector is different from other financial sectors. Banks are facing tight margins. The corporate banking IT budget is expected to grow by only 5.8%. Most of the banks’ spending is currently focused on meeting regulatory requirements and basic maintenance. As a result, there is little room for new innovation.
Capital markets are seeing the slowest growth. Buy-side firms have projected budget growth of just 3.7%.
According to Tom Scales, chief analyst at Celent, rising costs are a necessary step for insurance companies to stay competitive. “As budgets increase, firms are increasingly under pressure to choose the right technology as they seek to translate these investments into real operational improvements,” he said. ’
The findings are based on a survey of more than 1,000 executives in the global financial services industry. –Agency
