McClean, Va. -- Insurance companies that have not already implemented business process automation technology, including straight-through processing, integrated client information systems and service-oriented architecture (SOA) for customer service and administration functions, can improve efficiency by doing so. That's according to a report, titled "How To Create A Platform for the 21st Century Insurance Firm," released by BearingPoint Inc. a global management and technology consulting firm.In fact, the resulting increase in efficiency and productivity can mean greater capacity and as much as 30% costs savings contributing to overall better profitability, according to BearingPoint.
"The stakes have never been higher for insurance companies to reduce costs and improve efficiency," says Christopher Formant, executive vice president, global financial services. "Several factors are converging on the industry, including the opening of new markets around the world, the formation of an emerging middle class in Asia and the aging of Western populations, which increase the need for more diverse insurance products. Those insurers who can deliver products to market faster through advanced technology and delivery will be in a position to win big."
Other key trends detected by the global study for the next decade include:
* Insurance companies will act as an information network hub, with agents, banks, and policyholders as the spokes, able to initiate, or respond independently to requests.
* Business process automation solutions are the next breakthrough technology for the Insurance industry. These solutions will enable automated work assignment, eliminate manual tasks and unlock productivity through better use of information.
* The customer experience will be a key differentiator regarding how insurance and financial products are sold, delivered and fulfilled.
* The modernization of the large Asian economies will create a new, multibillion-member middle class. A key differentiator for insurers' long term growth will be how they adapt to the China's market, and Asia in general, where consumers' technology sophistication is often beyond that of Western countries.
According to Genworth Financial CIO Scott McKay, there is "an entirely new operating environment being created for insurers, with many not having the technology capabilities to service this new landscape. The companies that do will be in an advantageous competitive position."
"Our research shows that just by aligning business and IT, you can free up management to concentrate on customer service, product innovation, sales, marketing, branding, and corporate strategy," says Marcel Nickler, global Insurance lead for BearingPoint, based in Zurich. "The potential results can include cost savings and increasing the speed of bringing new products to market."
"Insurance companies need to recognize that this century will be dominated by a handful of global behemoths that will be able to leverage their technology for massive information repositories and analysis to better meet their customers' needs," says Paul McDonnell, senior vice president and lead of BearingPoint's U.S. Insurance segment. "A successful technology platform must be at the center of this evolution, one that will eliminate internal silos and allow customers and employees to access needed product information and business services."
The global study was developed in conjunction with Datamonitor plc, a U.K.-based business information company specializing in industry analysis. Datamonitor conducted the study for BearingPoint in the summer of 2005 based on interviews with chief information officers from leading global insurance firms.
A copy of the study can be found at www.bearingpoint.com/21stCenturyInsurance
Source: BearingPoint Inc.
