With 2011 right around the corner, many experts within the insurance industry are making predictions for 2011. From predicting insurers will need to create new products and services and leverage distribution channels to increase top-line growth and make investments that deliver more customer-centric IT capabilities, experts foresee an active year ahead.
David Niles, President of SSA & Co., a management and operations consulting firm for insurers and reinsurers, is in on the action, too.
Niles predicts five ways the insurance industry will change in 2011:
1. IT is going to become the it department. With growing companies and growing customers, the IT department will continue to evolve, emerging from the back office into the core of the company.
2. More and more complexity in the industry. There are going to be more products, more outsourcing, and more complexity in general. The challenge, other than juggling the growing arms of the company, will be in how to present this complexity to the customer.
3. Outsourcing is out. While outsourcing customer service overseas can be cheaper, insurance companies are realizing that the cheaper overhead doesn’t necessarily mean better bottom lines. Outsourcing some aspects of the business will remain, but outsourcing customer service will be reduced to help keep costumers happy.
4. Working harder to keep free agents. Insurance companies will have to work even harder to retain employees. With the initial investment it takes to train and attract employees, it will become more and more important to ensure a return on investment.
5. Focus on the bottom on the line. In 2011, we’ll see continued emphasis on cost reductions. This is an evolution from 2010’s attitude of having to be efficient due to pressure of investors; now, they’ll want to be efficient.
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Corrected December 23, 2010 at 9:15AM: yes