Tech investment gap between Canadian/US insurers

Canadian insurance companies invested about 33% less per person on information and communications technology (ICT) than did their US counterparts, according to a 130-page study released by the Centre for the Study of Living Standards.
The study outlines explanations for the ICT investment gap that exists between Canada and the United States. The study rates ICT investment in both Canada and the United States according to many different business sectors.
Overall, the report concludes, “in terms of total ICT investment per worker, the Canadian business sector invested only 45.1% of the US level.”
The Canadian insurance industry in 2004 invested $4,4043 per person in ICT, the study found. This compares favorably to the average Canadian business sector ICT investment of $1,468 per worker.
By comparison, the US insurance industry in 2004 invested an average of $6,024 per worker on ICT.
The study also found the Canadian insurance industry ranked second-lowest of all Canadian industries evaluated for computer investment per worker.
The country’s arts, entertainment and recreation industries topped the list of computer investment at a rate of 296.5% per person. The finance and insurance industry, on the other hand, invested in computers at a rate of only 37.7% per person.
The study found that firm size and labor cost differences accounted in part for the ICT investment gap between Canada and the United States.
Canada proportionally has smaller firms than in the United States, for example, and larger firms tend to invest more in ICT. the study notes.
Also, Canadian labor costs overall are 80% of US labor costs, the study observes. As a result, Canadian companies are more likely to rely on hiring laborers to perform tasks than relying on more expensive ICT solutions.