Personal lines carriers in the United States are using insurtech to focus on diverse research and development efforts, analytics, improved self-service capabilities (including mobile platforms) and core systems upgrades with an eye to the future, suggests a new report from Novarica.
The report – Business and Technology Trends: Personal Lines – was released on Tuesday by the Boston-based research and advisory firm. It provides an overview of personal lines insurers’ business and technology issues, data about the marketplace and more than 70 examples of recent technology investments by carriers, Novarica explained in a statement.
“Many carriers are investing in insurtech either directly or through venture capital groups to get early information on new ideas and to enable additional investment if warranted,” said Chuck Ruzicka, vice president of research and consulting at Novarica and co-author of the new report. “A few carriers are beginning to target digital-oriented consumers, assuming a paperless relationship (and perhaps a different price level) to target the Millenial market. With interest rates remaining low and competition for both clients and producers (including agents) high, carriers are continuing to look for ways to improve their cost profiles while creating competitive advantage through enhancements to products and services.”
Among the report’s findings:
Product innovation and speed to market are key to growing market share, with improved product modelling and management capabilities key to revenue growth in a highly competitive market;
Agents and customer portals continue to be viewed as key elements of acquiring and retaining customers;
Analytics are being applied to many aspects of the insurance process beyond pricing and loss prediction;
Carriers that have completed investments in effective and efficient core system workflows are accelerating expansion of their digital and data capabilities;
Carriers are improving customer experience with “straight-through processing,” but still have work to do, especially in post-issue service, which lags behind comparable functionality in other lines of business. Efforts to improve customer service are driving increased interest in document management and customer communications management solutions; and
Successful carriers are expanding use of business intelligence and analytics solutions to recognize and analyze market trends, product adoption and producer performance, with some carriers using wearables to gather health data from willing customers in exchange for discounts and rewards.
“In the continually competitive personal lines sector of the insurance industry, technology plays an ever larger role in the ability of insurers to attract, retain, and profitably serve clients, agents, and brokers,” the statement noted.