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Novarica Describes “New Normal” for P&C Insurers

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I just participated in a conference call with Novarica on their list of 100 technology-enabled business capabilities that represent the “new normal” for insurers. You can review the report here.

While the report itself is a fascinating look at some of the places that large P&C insurers are making technology investments, it is worth a close look at the information as a way of looking inside these large insurers to predict why the investments are being made.

One thing is clear, these insurers want to make it easier to be in contact with their customers, and not just from a marketing standpoint. There is a lot of work going on in electronic policy deployment, for underwriting and for invoicing. 

Let’s take a quick look at these three areas:

Policy Deployment – In these days of tight margins, insurers are driving every bit of direct cost out of their business processes. One, easily identifiable cost reduction method is to stop printing policies. The savings on paper and postage will be significant! Of course, if insureds want to maintain paper files, they will be free to print their policies, but at their own expense. Most insurers will be transmitting policy documents directly into their client’s Risk Management Information System (RMIS) or document management systems.

Underwriting – Large insurers are working diligently on “underwriting workbenches”, helping their underwriters automate data acquisition and analysis of the underwriting process, followed by electronic quote deployment. Here is another place where removing paper from the insurance process will be a big savings. When renewal clients or prospects can send underwriting data directly to the underwriter’s “workbench”, the process of account/risk underwriting can be streamlined, or even reduced to algorithms. 

Invoicing – Insurers both large and small have been tackling this costly process for many years. There are challenges in this area, especially for very large risks, where special payment and processing arrangements have been made. There are also unique revenue recognition and payment timeliness challenges with electronic invoicing and payment processes. I suspect this one will take a while to perfect in the large P&C space.

These are some of the obvious areas where the P&C insurance industry is developing a “new normal”.  Another one that will be beneficial to the entire market is the speed of developing new products.  Through the use of technology and the ability of those technology tools to collect and analyze very large amounts of data, insurers will be able to shorten the lead time for new product development.

A huge takeaway here for risk managers is the importance of keeping up with their insurers. It is becoming critical for risk management practitioners to collect, understand and use technology to facilitate effective insurance program management. Ultimately, the risk manager will either drive the data, or the data will drive them. 

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Jeff Gehrke is Ventiv's Chief Risk Technology Evangelist. Contact Jeff at Jeff.Gehrke@ventivtech.com or +1.720.445.9531. Connect with Jeff on LinkedIn: https://www.linkedin.com/in/jeffjgehrke 

 

 

The Definitive Guide to a RMIS

 

Jul 21, 2016

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