The Inter-Continental Pursuit of Efficiency

Much like their U.S. counterparts, European insurers are facing an extended period of flat premium growth.

A new report from Celent, “Tomorrow’s Leading European General Insurer: Four Elements for a Winning Strategy” notes that this slump is engendering three trends. One is that insurers are trying to become more cost-efficient. A second trend is capturing competitive advantage either through consolidation or organic growth. Lastly insurers are trying to capture more customer value by leveraging existing data.

To coincide with these trends, Celent offers European insurers some straight forward advice including refocusing distribution efforts and improving their brand positioning.

However, they also counsel some more novel techniques including encouraging insurers to look for best practices in other industries, even manufacturing. Indeed, the methods manufacturers use reengineering production processes are largely adaptable to information technology. “The use of manufacturing techniques implies the implementation of adequate technology to reach operational efficiency and maximize value to customers,” the report states. “Therefore technology is the foundation for the manufacturing approach, and what has already been done in the automotive industry presents a good example for insurers to follow.”

Celent says insurers can also prosper by redoubling analytic or “customer science” technologies. “Customer science is intended to increase understanding of customers, and then to differentiate among customers to capture greater value,” the report states. “In a market that struggles to grow, insurers have decided to leverage existing assets: their client data. Successful insurers are increasingly differentiating by capturing greater customer value. Their approach is to better use customer data to appeal to customers with improved products and services.”