In an effort to stave off the continued effects of the projected soft market in 2010, insurers are looking to technology for help. According to a recent survey conducted by IVANS Inc., 93% of insurance carriers queried are increasing their investment in automation technologies to improve operational efficiency. Additionally, adoption of technologies that streamline transactions between carriers and agents will continue to grow in 2010, as carriers look for ways to maintain profitability in a sluggish economy.
“Insurance carriers are shoring up operations and focusing on investments that help them do more with less,” says Clare DeNicola, president and CEO of IVANS Inc. “In large part, property/casualty insurance carriers reasonably weathered the economic turmoil of 2009 because they stuck to their core businesses. The industry will continue to be under intense financial scrutiny and, most likely, greater regulatory scrutiny, so the markets will look to carriers to make strategic investments that build on existing strengths versus breaking completely new ground.”
The data indicates that 82% of property/casualty companies plan to invest more resources within existing lines of business, whereas 41% of respondents plan to diversify their product portfolio across lines of business in 2010. In addition, respondents are focusing on keeping their existing customers satisfied. Seventy-four percent of insurers are investing in tools that help them better understand and respond to their customers.
While 41% of the respondents who participated in IVANS survey are expecting to increase their technology budget for 2010, carriers also noted the following top three challenges to achieving their business objectives:
• Competing priorities (91% of respondents)
• Lack of staff (78%)
• Need to update technology infrastructure (67%)
“Like most organizations, carriers are working with finite resources and want to invest in projects that will have the greatest impact on their business," DeNicola says. "Carriers realize they need to make technology investments to generate operational leverage and efficiency.”
The survey was conducted electronically from Dec. 29, 2009 to Jan. 12, 2010, and includes responses from 68 insurers from across the United States.
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