The insurance industry has a reputation for being cautious about change. Sometimes that’s a good thing, especially when it comes to prudently managing risk. But the process of adaptation can be a detrimentally slow process for some insurers, especially in the face of a changing competitive landscape and ever-higher consumer expectations.
Nolan’s latest P&C industry survey tells us that insurance executives are keenly aware of the factors driving change in the industry. Their responses reveal opportunities, challenges and trends in the areas of claims, underwriting, technology, social media, contact centers and organizational maturity:
- Economic growth is gradual with low interest rates putting focus on underwriting discipline, loss and expense management, retention and growth acceleration
- Competitive market conditions, coupled with favorable pricing trends, are emphasizing the question of how much rate is sustainable in the marketplace
- Managing balance sheet impact is becoming increasingly complex as leaders navigate the adverse effects of major catastrophes
- Technology continues to advance rapidly, and with it demand for capital investment.
- Reduction in claims loss costs and loss adjustment expense, as well as improvement in reserve management practices, are offsetting low investment returns
- Mastery of analytics, data mining and predictive modeling can create significant competitive advantages
- Social media in claims, underwriting, marketing and servicing continues to evolve, but the payback is unclear
The senior insurance executives who responded to the Nolan survey are cautiously optimistic about the evolution of the industry and, for the most part, the ability of their companies to respond. Their responses indicate that the tumultuous business climate we all face today is becoming the new normal.
The next several installments of Nolan’s contributions to this blog will contain a more detailed review of the survey responses in the areas of claims, underwriting, technology, social media, contact centers and organizational maturity. Stay tuned.
Rod Travers is EVP at The Robert E. Nolan Co., a management consulting firm specializing in the insurance industry. Robert E. Nolan Executive Director Ben DiSylvester also contributed to this blog post.
Readers are encouraged to respond to Rod using the “Add Your Comments” box below.
This blog was exclusively written for Insurance Networking News. It may not be reposted or reused without permission from Insurance Networking News.
The opinions of bloggers on www.insurancenetworking.com do not necessarily reflect those of Insurance Networking News.
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