Mired in a prolonged soft market exacerbated by a sputtering economy, insurers have more incentive than ever to reduce their cost base.
With claims costs making up a bulk of an insurer’s spending, rationalizing the process has become a top priority, notes Novarica in its Market Navigator: U.S. Property/Casualty Claims Solutions 2011. “P/C carriers are looking for ways to drive growth and improve operational effectiveness, and claims is one of the areas they are investing in,” the report states, noting that an estoimated 30-40 claims systems new sales were completed in the last year. “In fact, over 30% of carriers surveyed by Novarica say that claims is one of the top three projects they are focusing on for 2011. Claims play a critical strategic role in the overall success of a carrier. Close to 70% of their revenue is spent on claims – and about 20% of that is spent managing the claims process.”
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