A new study from Stamford, Conn.-based IVANS Inc. finds competitive and environmental concerns shaping the business practices and technology priorities of insurers.
“Staying ahead of the competition and maintaining market share have made customer retention and lifecycle management a business imperative for protecting carrier revenue,” the report states. “Many insurance organizations are looking to grow organically through existing lines of business and want to push automation further along into the customer management lifecycle, so they can respond more quickly to the needs and opportunities of customers.”
Indeed, the survey, which quizzed 68 U.S. insurance carriers from various lines of business, found 82% of respondents were building up existing lines of business, while only 42% were seeking to do so through diversification. With the industry firmly entrenched in a soft market cycle, the numbers revealed a focus on efficiency among carriers. “Insurance carriers need to examine their technology infrastructure and go beyond traditional ways of cost-cutting (i.e., downsizing) to focus on transforming their business,” it states. “Eliminating redundancies through automation, streamlining insurance transactions through a standardized workflow, and lowering costs by reducing the load on a carrier’s helpdesk will enable carriers to operate more efficiently and achieve greater, sustainable growth.”
In addition to the soft market, the evolving regulatory environment is also causing carriers to reconsider their infrastructure. “While the debate over the roles of state versus federal oversight continues, there is little doubt that carriers will be subject to greater regulatory scrutiny in the coming years,” the report states. “Insurance organizations will need to anticipate the ramifications of these regulations and plan for the technological resources required for compliance. Those carriers that can quickly adjust to changing regulations using cost-effective methods will have a large advantage over those that do not.”
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