Chicago — INN joined industry experts in Chicago on Dec. 11, 2008, for
Most carriers are overrun with variations of the administrative forms required to sell and service their products, according to Celent’s September 2008 report, “Challenges in Leveraging Bureau-Based Content.” This, according to Celent, increases the analytical challenges placed on pricing and underwriting, makes marketing the company’s value more difficult and drives up administrative costs. The firm’s experience and results from a carrier panel served to highlight these problems.
Celent’s Mike Fitzgerald, co-author of the report, presented some highlights of the report, which summarizes thoughts from 31 carriers questioned by Celent. Fitzgerald revealed some of his research that, on average, companies surveyed create 989 new forms, update 1,548 and retire 249, annually. Attendees did not disagree with the numbers, and one attendee even said he was surprised the number of retired forms was so high.
One of the many reasons for so many new forms and updates to current forms is the legislative and regulatory environment in which insurers function. The majority of the attendees agreed that insurers are overrun with regulatory changes and legislative updates, requiring necessary periodic forms evaluation. This is understandable when you consider that 79% of the companies surveyed write business in 41 or more states, and have different state regulations with which to comply.
So, what’s the solution? And is current technology up to the challenge of managing the process? A little more than half (59%) of the survey respondents use “typical” tools and processes, which "do the job," but could be improved. A quarter of the respondents said they use outdated tools and processes and “want to throw it all out and start over.”
Even with the proper tools, forms management can be tricky with 10 or more people accessing the forms, said Fitzgerald.
Attendees discussed the question, “Are insurers willing to implement central control and lock down forms?” One attendee said she has seen small to medium-sized insurers do this, but hasn’t seen it done in larger insurers.
Lloyd Chumbly, assistant VP, standards at
Wrapping up the roundtable discussion, Fitzgerald stressed that because of the current business climate, regulators and consumers are going to change the way they look at the insurance industry in the next two years, and managing bureau-based content is going to be more important than ever.
Sources: Celent, INN archives
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