Insurance industry expects to invest heavily in the next three years towards ultimate objective of “policy at inception”

Seeking that ‘Holy Grail’ of producing a policy at inception will motivate the insurance industry’s technology spending over the next three years, according to a panel of senior U.S. insurance company and broker executives speaking at the 2012 Risk and Insurance Management Society (RIMS) Annual Conference & Exhibition in Philadelphia on Apr. 17.

David Bidmead, CEO of Marsh U.S.A., said the industry is trying to narrow the gap between what people expect in terms of how they personally interact with organizations through technology, and how they currently interact with the insurance business through technology.

“I think the expectations we all have about efficiency and technology are increasing,” Bidmead said. “And I think there is a divergence between our personal experience and our professional experience and the challenge for all of us is to get closer, frankly, to what our clients want.”

Illustrating the personal expectations of the consumer, Patrick Gallagher, chairman, president and CEO of Arthur J. Gallagher & Co., shared a personal anecdote about contacting Amazon to have his broken electronic reader repaired.

He went online to research the problem and wished to talk to someone about it.

“So I click, ‘Yes,’ I want to talk to someone,” Gallagher said. “Not even 10 seconds later, the phone rang. ‘This is Amazon calling.’”

“Really…?”

His story reflects the contemporary expectations of the insurance industry as a whole. From a client or consumer perspective, speed is of the essence, and this may demand “a re-design of the core [insurance] transaction process” over the next three years, said Bidmead.

Where brokers are concerned, this may lead to brokers providing real-time access to brokers’ systems, said Eric Andersen, CEO of the Americas for Aon Risk Solutions.

“The next wave you are going to see in the brokerage community is to take all of these various investments in technology and frankly allow the client access into our systems, so that they don’t have to come to us first,” he said. “They can do that anytime they want, from wherever they are globally, to get policy information, market information or to get updates on whatever they want to see that we have.”

However, consolidating the information and data required to provide such immediate service to clients and consumers will not be easy, especially for global companies, said Shivan Subramaniam.

“The big challenge we are all going to have, especially with multinational programs, is that you cannot always consolidate information across multinational lines because of legal and regulatory reasons, and that’s one of the key issues we’ll have to deal with. It’s not something that is straightforward.”