European and Asian life insurers are outpacing their North American counterparts at streamlining and centralizing policy administration systems-the core systems that support and deliver insurance products for their customers, according to a global survey of more than 100 insurance technology professionals commissioned by Bermuda-based Accenture.Globally, respondents that have consolidated their policy administration systems on average reported a 19% reduction in operating costs, a 25% reduction in IT costs and a 35% increase in the speed at which they introduce products.
"Our research indicates that the relatively high degree of systems consolidation among European insurers, if properly leveraged, could bring real strategic advantages as these insurers pursue new markets domestically and abroad," says Serge Callet, global managing director of Accenture's insurance practice.
"Indeed, for any insurer facing the challenges of product diversification, service-quality improvement, and merger integration, having a streamlined and nimble policy administration system will be vital," he says.
European respondents were three times as likely as North American respondents (30% vs. 9%, respectively) to say their companies will, within two years, be part of a merger or acquisition-a major cause of system redundancies, according to the survey.
The survey also suggests that North American life insurers are operating a greater number of policy administration systems than insurers elsewhere. One-third (34%) of respondents in North America said their companies use 11 or more product platforms, compared with one-fifth (20%) of European respondents.
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