As with most industries, insurers will need to do more with less in 2009. Carriers will continue to look for ways to increase productivity and efficiency by extending more of the processing and servicing capabilities out to their agents and policyholders. An emphasis on underwriting for profit and an adequate rate structure will force carriers to come up with creative ways to attract more new business and to retain the good business they already have on their books. This means IT strategies will need to be reprioritized and focus instead on projects that deliver speed to market, ease of doing business and improved data analysis.
Speed to market is critical in order to take advantage of new markets or make rating or underwriting adjustments in current markets. Insurers are finding themselves drawn to out-of-the-box software solutions that enable them to take a proven solution and rapidly deploy it for new products or state expansion. Similarly, when a carrier identifies a class of business in a given region that offers excellent potential for underwriting profit, it needs the power to tweak products and pricing quickly to get the changes on the street before the competition catches up to them. Look for carriers to forego highly custom solutions and move to more of an out-of-the-box system that enables them to achieve their speed-to-market goals.
Most carriers have already introduced agency portals and/or consumer access to policy information. In 2009, those portals will be expanded to enable agents to process more types of transactions online, to print and distribute their own policies, and to do more front-line underwriting before business is submitted to the carrier. IT strategies will include building more underwriting rules and analysis into the point-of-sale process so that agents can issue transactions and insurers can opt to review only certain classes of business. Agents will appreciate the ease with which they can get their new policies issued, and carriers will benefit from the ability to write more good business without an increase in staffing.
In support of these strategies, we'll also see a renewed emphasis on data mastery. Carriers need to be able to analyze their data in order to identify niche markets or to respond quickly to changing market conditions. Data warehouses and analysis tools play an instrumental role in supporting carriers' growth and profitability goals.
While highly customizable systems can still be developed for any size carrier, the balance between going with an out-of-the-box system versus creating a customized, lengthy and expensive system has been trending toward speed-to-market decisions, especially during these trying economic times.
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