Insurers Prefer Outsourcing Over Cost Reduction, Says Report

Research reveals boost in technology and business outsourcing owing to increased focus on customer experience and risk management by insurers

According to studies conducted by Everest Group, in 2012, information technology outsourcing (ITO) and business processing outsourcing (BPO) in insurance have witnessed growth of 18 and 15 percent respectively. Cost reduction is no longer the main focus. Companies, while doing outsourcing, are stressing on enhancing company technology.

The reports were prepared after analyzing the current market trends and predict the future of outsourcing relationships. The reports clearly highlight insurers’ need for strategic partners who can help with developing solutions that will boost efficiency and keep up with new technologies. [@PCITplus]

The 3 Greatest Innovation Areas In Insurance

Insurance has seen some of the greatest innovations in 2013 and marketing is not the only area providing through-puts, according to a recent report.

In its second annual report entitled: Innovation in Insurance, research and consulting firm Strategy Meets Action (SMA) revealed that almost every insurance company (87 percent) who participated in its research have either implemented or carrying out some form of innovation. The report highlights that while in 2012, insurers were just tipping towards establishing a collaborative environment and nurture innovation, 2013 has been a year of great innovations in insurance. In 20 percent of the companies, innovation has become one of the key focus areas.

The only constant from last year is the change agent that’s driving innovation. Competitiveness, growth enablement and great customer service were regarded as the top drivers of innovation by 80 percent of the participants, according to the report. [twitter.com/PCITplus]

Here’s How Business Processes Can Be Streamlined Using Social Media Tools

According to experts, social media tools designed for the enterprise class can efficiently streamline business operations by improving the quality of data used in making risk management decisions. [twitter.com/PCITplus]

Jon Bidwell, Chief Innovation Officer at Chubb Corp said that their company is using social media tools to share knowledge throughout its organization. Mr. Bidwell commented, “When we look at ultimate business impact, particularly in knowledge-based industries such as ours, we are finding that the ability to extend social-based platforms as private, interactive, on-demand networks is where the next wave of productivity improvements will come from. It allows us to flatten the organization and move information around more effectively.”

Use of social media tools has exceeded the limitations of traditional information sharing channels such as emails and has enabled “cross-pollination” of ideas”.

Top 10 Complaints Against P/C Insurers By Market Examiners

According to a new report, the top two criticisms reported by market conduct regulators against property/casualty insurers are failure to handle claims within specified time frames and using unapproved forms and rates. Wolters Kluwer, a financial services company created a report listing the top 10 criticisms found on U.S. insurance market conduct exams. [twitter.com/PCITplus]

This was the company’s ninth annual report showing that claims handling, licensing and underwriting issues continue to dominate regulators’ complaints against insurers.

Kathy Donovan, Senior Compliance Counsel, Insurance at Wolters Kluwer Financial Services said, “The regulatory landscape is getting more complex as industry requirements, laws and regulations change constantly under the direction of government and industry oversight, making it extremely challenging to embed regulatory requirements into claims, underwriting and distribution processes. Strong regulatory change management processes and frequent self-audits are extremely effective in helping stay on top of these changes.”

Agencies Set To Increase Tech Investments: What Carriers Should Know

Insurance agencies are expecting an increased tech investment especially in social media and improved management systems. Many agencies are taking this step following a strong growth in the industry.

An independent study conducted by the Independent Insurance Agents & Brokers of America (IIABA) showed that insurance industry-wide agencies, both small and large, are keen on increasing technology investments.

Smaller agencies with revenue under $5 million are targeting social media and Internet marketing in for their investments. But it should be noted that even though there has been a strong uptake in the social media sector, agencies will continue to face marketing challenges.