Stamford, Conn. – By 2010, health insurers will be looking over their shoulders at what otherwise might be considered unlikely competition—banks. Such is one of several predictions made this week by Gartner Inc. research analysts in Stamford, Conn.
Insurers also are facing key issues such as staffing levels, healthcare spending account providers and the mismatch of data used by business intelligence tools, reports the firm.
Gartner predicts that by 2010, the fastest erosion of health insurance revenue will be due to an invasion in this space by banks. Health insurance companies are managing less medical risk and are forced to compete on administrative transactions, says Gartner. Consumer trust in banks as service providers, their transaction accuracy and security is significantly higher than that for health insurers. Health insurers failing to transform to a business model that integrates health insurance with financial products will suffer the same fate—marginalization or departure from the market—as insurers that failed to move from indemnity insurance to managed care.
For P&C and life carriers, Gartner also predicts that through 2010, IT and knowledge worker staffing challenges will drive a 30% increase in rule-based systems, knowledge management, outsourcing and training. Insurers will have difficulty during the next five to 10 years retaining their core process knowledge and maintaining the aging legacy systems that they continue to run, says Gartner, which recommends that companies implement new processes for knowledge management, training, recruiting and rule-based systems to overcome this challenge.
Gartner’s predictions on how insurers manage data take the industry to 2012, when, says the firm, dirty data will cause 50% of insurers to have compromised decision-making assumptions despite the deployment of enhanced BI and analytic tools. Invalid information, so-called "dirty data," increasingly populates databases and operational history files. Reliance on unrecognized, often erroneous, data points to make business decisions compromises the integrity of those decisions. Gartner recommends that companies engage in data-cleansing projects in conjunction with business intelligence adoption.
“The failure to understand the importance of these evolving trends will cause insurers to underestimate the technologies and strategies that can enable change,” said Annemarie Earley, managing VP for Gartner’s Financial Services research team. “Insurers must invest now in strategies, processes, documentation and technology deployment—to expose weaknesses and provide a roadmap for business and technology investment, to curb the effect of these trends.”
Source: Gartner Inc.
Exclusive content available only on InsuranceNetworking.com
Register or login for access to this item and much more
All Digital Insurance content is archived after seven days.
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access