Insurers are engaged in an industry-wide effort to more effectively engage with customers, exploit information and analytics and manage risk, according to “Top Issues: The Insurance Industry in 2013,” from PwC, an annual report on opportunities and challenges for insurers. Insurance industry leaders, PwC said, are concentrating on ways to improve data collection and analysis, as well as claims, billing and other operational areas.
"All of these initiatives have a common goal of increasing efficiency and growing the business," said Jamie Yoder, PwC’s U.S. Insurance Advisory Practice co-leader. "These developments will touch every part of an insurer's business – from risk management to product development to customer service."
Highlights from the report:
Customer Experience: E-commerce and mobile technologies have led consumers to expect convenience, simplicity and transparency. Changing demographics have created new market segments, which have new needs and customers said carriers fall short of customer expectations, missing a potential competitive differentiator. Competitive carriers are investing in understanding consumer and policyholder expectations.
"It is important for insurers to tap into technological advancements to stay current but also have an open line of interaction with clients," Yoder said. "Revisiting customer experience programs, changing traditional distribution platforms, designing products that balance consumer and producer needs and differentiating value proposition through new models of advice will help open the door to new opportunity, business and profit."
Information Advantage and Big Data Analytics: Analytics is now a cross-functional group with executive level visibility, PwC said, and insurers that leverage analytics should be able to make better business decisions more quickly and mobilize teams to connect better with customers, leading to success and growth.
"In 2013, we will likely see insurers increasingly bring in external sources of information and combine it with internal data to deliver business intelligence to the field," said Anand Rao, principal in PwC's U.S. Insurance Advisory Practice. "Leading insurers are exploiting advanced big data analytic techniques to go beyond predictive modeling in an effort to simulate future scenarios and visualize the impact of their decisions on operations."
Operations: By combining a customer-centric view of the billing process and applying the most effective technologies and tools available, insurance carriers are significantly streamlining their billing processes, reducing costs, reducing errors and enhancing customer satisfaction and loyalty, PwC said. Insurers also are investing billions of dollars to improve the claims process and better manage the data now available. Carriers also are refining vendor relationships by embracing new technologies, such as smartphone apps and sensors, which offer more actionable insights into customer behavior and expectations.
Emerging Changes in Auto Insurance: Advancements in auto technology have helped insurers better manage risk, but affinity groups, changing ownership patterns and self-driving cars will require new insurance products and distribution methods.
"As the results of PwC's 16th Annual CEO Survey further validate, 2013 is a year of moving forward for insurers,” Yoder said. “They are taking the customer experience and advanced analytics pilot programs out of the testing stage and into the action stage. This action will likely be a defining moment for the industry."
