In the face of increasing profitability pressures perpetuated by highly competitive marketplace conditions, US personal lines insurers are sharpening their focus on business intelligence, policy administration system replacement, portal functionality, and claims systems replacement, according to a report released by Novarica. The report, Business and Technology Trends: Personal Lines, includes data on the marketplace and over 30 named examples of recent technology investments by personal lines insurers, in addition to an overview of personal carriers’ business and technology issues.
“As the market continues to be soft, we are seeing personal lines carriers looking to invest in initiatives that promote growth strategies, expense reduction, and improvements in underwriting results,” said Karlyn Carnahan, a principal with Novarica and author of the report. “Business intelligence, policy, agent portals and connectivity, and claims are definitely key technology areas for these carriers to help confront stresses on profitability.”
The report also discusses the issues and approaches carriers must consider when beginning projects in these areas. Those looking to invest in business intelligence, for example, should start with data-quality initiatives, and then overlay a business intelligence tool such as a predictive analytics module or an organisation that can provide pooled data and insights. Carriers should also consider upgrading their policy administration systems to gain operational efficiencies and flexibility in their ability to add data—which will in turn improve risk selection and risk pricing, and reduce operating expenses. Extending functionality to agents continues to be important, as agents and carriers increasingly prefer to receive and provide information electronically and process it with as little human touch as possible. Lastly, insurers should automate claims processes to speed up claims service, which will provide consistent and fair best practices to all customers. In addition to these recommendations, the report includes an overview of the personal lines marketplace, a summary of the insurer landscape, and a discussion of the top core application issues with examples of projects insurers have recently initiated in this area.
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