Insurers see mixed results from technology: TTP survey

North American insurers have not yet realized the promise of technology investments, but appear hopeful those benefits will be seen in the future, suggests a study by Tillinghast-Towers Perrin (TTP). The survey, which tracks 248 financial services providers, largely insurers, also shows that despite the events of September 11, insurers do not plan to back off from technology investments in the future.
Bottom-line payoffs from technology investments to-date have been ‘mixed’, insurers report. While over 80% say that employee productivity and turnaround times have improved as a result of these investments, only half have seen returns in net operating results, growth and return on investment.
One issue insurers raise is the need to improve the metrics used to define “success”. “Over a third of companies say that over the last three years they don’t know about or don’t measure such things as channel profitability or customer profitability,” says Jenny Emery, TTP’s global e-business leader. Many companies note that they plan to begin using such new metrics in the future, she adds.
Despite the mixed results, insurers remain confident that technology investments will begin to pay off in the next three years. Specifically, an overwhelming majority see results in profitability, market share, revenue/premium growth and expense ratios, becoming evident in the future.
Despite dealing with the largest loss event in insurer history, the terrorist attacks on September 11, p&c insurers specifically see promise in technology. In fact, many report that the attacks have shown just how valuable a role technology can play.
“P/C insurers were the hardest hit by September 11 and more than other respondents indicated new technology was helping them manage the impact of the attacks in their underwriting, pricing and products,” says Emery. “Based on anecdotal evidence, we believe this is a response to the reinsurance markets hardening and primary insurers hoping that improved access to greater volumes of data can help them better understand increased concentrations of exposure and risk.”