Although information technology is a strategic differentiator for insurance companies, they often run into difficulties defining the appropriate methods for spending in this area.

However, according to a study by the Ward Group, after some down years for investments in IT, insurance companies are increasing their IT budgets for 2011.

Fifty percent of respondents said they were budgeting the most money toward housing data, while 39 percent said they would invest in server support.

But, the most significant result of the study is IT staffing, which 52 percent said they were increasing, specifically in application development. Also, 28 percent said they are increasing IT staffing for data warehousing and 28 percent for quality assurance testing.

According to the report, only 27 percent of respondents are decreasing their IT budget.

“Companies are making an effort to reduce staff augmentation contracting and right-size internal staffing levels to accommodate development demands,” said the report.

IT budgets for small- and medium-sized businesses are also increasing. According to a study by Spiceworks, SMBs have shown their strongest gains in more than 18 months, increasing overall IT budgets by 8 percent.

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