Many P&C technology vendors are expecting year-over-year revenue growth in 2013, and the number of optimistic vendors gets even higher when asked about 2014 and 2015, according to a new survey from Aite Group.
Vendors are expecting much of that growth to come from P&C carriers purchasing external software; hardware sales are expected to be flat, or slightly down, for 2013. Yet, Aite points to a few specific disconnects where P&C vendors are not meeting carrier demands.
For the report, titled “Insurance Technology Vendors and P&C Carriers: Alignment and Disconnects,” Aite asks 23 P&C technology vendors about their products and and what areas they feel they offer significant impact for insurers.
For example, a vast majority of vendors offer products and services for new business/underwriting (91 percent), BPM/workflow (86 percent), claims processing (82 percent) and policy administration (77 percent). Marketing (18 percent), risk management (23 percent), infrastructure (41 percent) and management/financial reporting (45 percent) are among the least-commonly offered products and services.
When asked how much impact they expect to have on certain areas of over the next couple years, data and analytics received the most attention, with 79 percent of respondents indicating they expected to have a lot of impact in this area. Operations (78 percent) was a close second, followed by next-gen technology (74 percent) and customer experience management (74 percent). Fittingly, when vendors were also asked about the broader categories they served, they responded particularly strong when it came to BI.
The report also offered ways in which vendors and P&C insurers are aligned in their focus, and ways in which they are disconnected. When it comes to claims, processing software is offered by 82 percent of vendor respondents, which is appropriate, according to Aite, given the amount of costs and room for savings P&C carriers see in this area. Similarly, 83 percent of vendor respondents offer BI solutions and 59 percent offer core systems—both areas receiving increasing attention from insurers.
Conversely, 23 percent of vendor respondents provide risk management products, yet this is among insurers’ highest priorities, according to Aite. Also, vendors ranked next-gen technology as a highly impactful product, while only 41 percent actually offer products such as telematics and UBI solutions.
Lastly, 83 percent of participating vendors believe that driving technology innovation is their greatest impact on insurance IT executive performance, yet only 61 percent of these same vendors think that innovation will have a large impact on businesses. Aite suggests that many of these vendors are paying lip service to helping carriers with innovation.
Carriers are balancing multiple competing priorities—implementing new core systems as well as cloud, distribution, content management, telematics and analytics technologies to help them manage and achieve transformation and meet the customer engagement demands and expectations. And, Aite encourages vendors to “do a better job aligning their solutions with carrier needs, current as well as anticipated.”
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