Disconnect between form customization and business strategy drives up carrier costs

The amount of form customization rarely matches the amount called for by an insurer’s business strategy, leading to an increase in analytical challenges on pricing and underwriting, marketing difficulty and an increase in costs, a Celent report warns.
In its new report, ‘Challenges in Leveraging Bureau-Based Content,’ Celent suggests that carriers assess their competitive approach and explicitly outline their forms strategies.
The report posed the following questions to North American property and casualty, life and multi-line insurers:
What is the current state of play in using bureau-based administrative forms?
What is the context for use of bureau-provided content, such as policy forms, rates, rules and forms?
How can companies best balance the efficiencies gained through use of standardized content with the value from product differentiation?
Researchers found that common threads across carriers’ forms management approach included the following:
Forms are being created three times faster than they are being retired;
Two-thirds of insurers have customized virtually everything about a typical product; and
The biggest drawback of heavy customization is the effort required to keep up with changes to standardized content.
To improve the alignment of business strategy with forms maintenance, actionable suggestions are made in three focus areas (market development, product creation and product maintenance).
“The suboptimal use of forms and standardized content results from the reuse of traditional approaches and technology, whereas a deliberate strategy could enable vast improvements,” said Craig Weber, senior vice president with Celent’s insurance practice and co-author of the report.