Industry Briefs

What Impact is Mobility Having on Insurers?

Insurers will have to adapt to the increasingly prevalent use of mobile devices, a new study from the University of South Carolina finds.

The study says that as the world nears one billion mobile devices in use, insurance companies will need to invest in mobile channels in order to service their customer base.

"Mobile technology presents the insurance industry with an opportunity to meet two familiar and linked challenges: adopting new technology and marketing to young customers," the study states. "Handset owners constitute an extensive technology infrastructure that many insurers are not pursuing aggressively enough, if at all."

Yet, the decision to invest in mobility requires a complex subset of decisions regarding competing and complementary technologies. For example, insurers must choose whether to focus on optimizing their existing websites for use on mobile devices, or to develop apps for specific mobile operating systems, such as iOS, Android and Windows Phone 7.

The report says the influx of mobility into insurance will challenge risk managers and security personnel as well.

"A downside of new access points (such as mobile devices) in to corporate systems is pressure on companies' security capabilities," the report says. "But overall, the threats facing mobile systems are not drastically greater than those on the desktop and the Internet. Platform makers, app creators, and Web designers are now more aware of security flaws, and security has become a crucial part of development and testing of mobile systems."

 

Carriers Need to Learn to Talk to Gens X & Y

A LIMRA study finds that Gen X and Y job seekers are interested in working in a stable industry with lots of growth potential and opportunities to make a difference in people's lives. What they don't know, however, is that the financial services industry provides this.

"Gen X and Y job seekers have some real misperceptions about the financial services industry and the image of a sales person within the industry," says Polly Painter Eggers, analyst, LIMRA Distribution Research. "We know that many of these disconnects are just a lack of understanding by both the job seekers and recruiters."

The study showed that many carriers have held on to traditional recruiting and compensation structures that, while popular with Baby Boomers, have not attracted younger job seekers. For example, Gen X and Y job seekers surveyed said they value stability and security over the potential of making a lot of money; however industry recruiters still try to lure potential candidates with the opportunity to make money and the lifestyle that usually follows.

For the most part, the study says that Gen X and Y job seekers are interested in being part of a team that they feel will make a difference in their world. Conversely, industry recruiters often emphasize the individual aspects of sales and the ability to 'be your own boss', rather than the team element, LIMRA says.

 

Insurers Continue to Disappoint Customers

Consumers apparently don't look too kindly upon health insurers. New research from the Temkin Group finds that both health and property/casualty insurers tend to let their customers down.

The consulting and research firm surveyed 6,000 U.S. consumers about their recent interactions with companies. The consumers named 143 companies across 12 industries, which included health and P&C insurers.

Temkin Group found that retailers provide the best customer experience, while health plans and P&C companies lag behind. The average score for health plans (50%) fell between poor and very poor. Exceptions in the health plan industry were TriCare (65%), Medicare (59%) and Kaiser Permanente (57%), which all scored above the industry average. TriCare was the only health plan in the top half of the ranking.

P&C insurers scored just a bit higher at (59%), but still in the "poor" range. Exceptions in this category were USAA (71%) and American Family (66%).

 

Despite Nebulous ROI, Firms Embrace Social Media

It's notoriously hard to measure the return on investment in social media. But a study from American Century Investments does show that financial services professionals are increasingly embracing it.

The study found that 86% of financial services professionals use social media, up from 73% a year ago.

Half of those professionals have moderate or extensive experience with social media. About 43% regularly participate in at least one medium, with nearly 10% saying they're a "social media addict."

As was the case last year, Facebook had the highest percentage (71%) of respondents with accounts. LinkedIn held the second spot with 55%.

Which businesses uses of social media are on the rise? Eighteen percent of respondents said they plan to maintain a professional blog in 2011, up from 8% in 2010. Using social media for customer feedback jumped to 21% from 12%, and sharing best practices went to 18% from 12%.

Conversely, few study participants ranked social media as having "high business value." Yet the percentage that did rose two points this year to 13%. And 56% of financial pros said they feel social media is an "emerging trend with significant future potential." That's up from 44% last year.

 

Are Health Care Costs Crippling Consumers?

Health insurers may be interested to learn that their customers are actually spending far more for their own health care costs than the government traditionally reports.

A Deloitte report reveals that consumers are spending $363 billion-or 14.7% more-on health care than what is reported in official government accounts.

When placed into context of how consumers allocate discretionary expenditures, Deloitte finds that they're spending 19.9% on health care (up from 16.2%, according to government reports), compared to 18.8% on housing and utility costs.

 

Life Insurers to Achieve Organic Growth Using New Technology

Few would argue that the last few years have been easy on life insurers, as the financial crisis devastated their balance sheets and the soft economy dampened demand for their products. However, a recent Celent report examines how insurers are reinvesting in technology to counter these economic headwinds.

The study says insurers are increasingly looking to new underwriting solutions to achieve organic growth and cut costs. With external forces conspiring against this effort, reducing cycle time is one way to spur it along.

Additionally, new, purpose-built underwriting systems are making greater use of analytics by directly linking to third-party data sources, the report notes.

 

Disasters Cost Insurers $43 Billion in 2010

A sigma study from Swiss Re reveals what many insurers already knew-that 2010 was a horrific year in many ways. Worldwide economic losses as a result of natural and man-made disasters last year totaled $218 billion-more than triple 2009's $68 billion sum. On top of this, the global insurance industry was on the hook for more than $43 billion of that, a greater than 60% rise from 2009.

Swiss Re's research broke down the $43 billion total cost to insurers, finding that natural catastrophes represented about $40 billion, while man-made disasters resulted in additional claims of more than $3 billion. By comparison, overall insured losses totaled $27 billion in 2009.

Additionally, the report said earthquakes accounted for nearly 33% of all cat losses in 2010. The February 2010 earthquake in Chile and the September earthquake in New Zealand were the two costliest events in 2010, and led to estimated insured losses of $8 billion and $4.4 billion, respectively.

 

Insurers Going to the Web For Agents

Despite the many concerns about the health of the industry amid the seemingly endless soft market, many insurers are currently on the lookout to hire large numbers of agents nationwide.

Allstate recently announced that it hopes to hire more than 100 agents in five Southwestern states to open offices in Arizona, Nevada, New Mexico, Oklahoma and Utah. As part of its efforts to attract potential agency owners, Allstate launched More2You, a regional networking and career recruitment platform intended to engage would-be Allstate agency owners and start a dialog about agency opportunities. The insurer also is utilizing Twitter to reach out to potential agents, who can learn more by chatting with Allstate in real time at www.twitter.com/more2you.

Much like Allstate, New York Life recently said that it had launched a new career website for job seekers. Designed to provide easy access to information about the benefits of a career in life insurance and financial services, the site targets individuals in all stages of their professional development, as well as opportunities in management. The website, www.newyorklife.com/careers, is part of New York Life's efforts to recruit more than 3,500 new agents in 2011.

 

Teen Drivers Crash 4x More Than Adults

State Farm and Children's Hospital of Philadelphia teamed to conduct a study that hones in on the most common errors teen drivers make that lead to a serious crash.

By getting specific about the types of teen driver errors that are most likely to precede a crash, the study helps to target policies, programs, driver education and other strategies to prevent crashes from happening. Seventy-five percent of these crashes were due to a critical driver error, with three common mistakes accounting for nearly half of all serious crashes: lack of scanning that is needed to detect and respond to hazards, going too fast for road conditions and being distracted by something inside or outside the vehicle.

 

Best of Our Blogs

from: Ara Trembly, April 7, 2011

topic: Security Breach at The Hartford is a Dire Warning

... Hackers have broken into The Hartford and installed password-stealing programs on several of the company's Windows servers. Although the extent of the damage is said to be minimal, it has prompted The Hartford to launch a complete review of its security procedures.

While the size of this event was not significant, there are several disturbing signs here. First, [as of this writing] The Hartford reportedly was still not sure how its systems became infected. In a Q&A document given to employees, the company said, "Since the virus infiltrated our systems before our anti-virus software had the ability to detect it, The Hartford is conducting a complete investigation of its security procedures and will implement additional security measures to close the gaps we identified."

For now, it's important to remember that what happened at The Hartford could easily have happened at any other insurance company. While you may be wiping your brow and thanking your lucky stars that this story was not about your company, try not to forget that the next breach could be right under your nose. An industry that thrives on assessing risk needs to take a look at its own profile and step up efforts to secure the sensitive information on our customers and our associates.

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