Technology spending priorities are shifting to the front end for specialty lines carriers a new report from New York-based Novarica finds.
The report, "Business and Technology Trends: Specialty Lines Insurers," is the latest in a series that looks at key business and technology trends in specific lines of business in the U.S. insurance industry.
Far from being a monolith, the specialty lines segment is a actually a rubric used to describe a wide variety of insurance operations. One commonality is that the business is not typically written through standard markets. Bearing this diversity in mind, the technology needs of the companies can vary, says Novarica Principal Karlyn Carnahan, who coauthored the report with Senior Researcher Steve Kaye.
“Certainly, those carriers with very niche programs or small volumes of unusual coverages do have a tendency to start with a package and heavily customize it or build it themselves,” Carnahan tells Insurance Networking News. “Those carriers that are writing more standard lines of business but focusing on unique niches are perfectly able to use vendor packages.”
When it does come time to spend, the report found carriers investing in core claims and policy administration systems as well as front-end applications, such as agent portal and sales administration support.
Carnahan says one surprise is that specialty lines carriers are automating reinsurance functions as much as one would think. “The specialty sector has a lot of complex contracts and relies heavily on reinsurance because their business has a higher risk profile,” she said. “So I expected to find more instances of specialty carriers using packaged solutions to track contracts. That said, they are doing a lot of modeling work.”
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