As carriers looked to replace core systems in recent years, the initial emphasis was largely on policy administration systems. Now, the action seems to be shifting toward adopting modern claims solutions, a new report from New York-based Novarica notes.

The report, “Novarica Market Navigator US Property/Casualty Claims Solutions 2010,” charts this trend, estimating that between 30 and 40 claims systems new sales were completed in the last year.

“Claims administration systems are being replaced at an increasing pace in the insurance industry,” says Novarica principal Karlyn Carnahan, lead author of the study. “While many carriers have already upgraded and others are in the middle of a claim replacement project, a majority of carriers are in the planning phase for a core claims system replacement.”

Novarica attributes much of this activity to a newly broad range of vendor offerings, noting that P&C insurers now have more than 20 active solutions to choose from. Designed for service oriented architectures, these modern systems typically are configurable, browser-based and many also have business intelligence tools built in, the report notes.

“The quality of a carrier’s claims service heavily impacts the customers’ view of the carrier because other than the bill, claims are typically the only contact a customer has with a carrier,” Carnahan. “And a bad claim experience is one of the top reasons for non-renewal. In today’s competitive environment, where retention is a critical imperative for carriers, claims handling is a major source of competitive advantage for property/casualty companies.”

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