The US property and casualty insurance industry is experiencing its share of positive and negative volatility, largely the result of disruption (insurtech and market), increased competition and ever-changing customer requirements. In this evolving business environment, many carriers are rethinking their growth strategies with a focus on internal measures that can improve how they pivot and respond.
This means examining existing workflows and processes, embracing digital technologies, and applying changes where it makes the most sense. If approached properly and with the right help, carriers can free up existing resources and focus on driving growth with innovation and new products.
The Everest Group, a management consulting and research firm, has identified five strategic areas that insurers should focus on while “riding market dynamics in a planned manner:”
- Technology leverage
- Customer experience
- Underwriting excellence (and fraud control)
- Product innovation
- Effective capital management
The question remains: is it possible to keep your eye on existing operations while determining efficiencies that drive profitability? Let’s look at claims processing as our example, because it has the potential to leverage three of the five areas mentioned (technology, fraud control, customer experience).
A review of all claims operations (FNOL, call center operations, the addition of a claims portal, subrogation management, litigation management, close of claim to name a few) will identify operational excellence, inefficiencies, holes in productivity and related fraud waste levels. Obviously, not all tasks within a claims organization qualify for a digital makeover, but with the help of a trusted business partner, insurers can employ digital technologies and services to areas where that makeover will make a difference.
By simplifying the claims handing experience, insurers stand to improve loss ratios and customer service levels while simultaneously reducing loss-adjusting expenses. This approach allows the insurer to keep an eye on the bottom line so they can focus on further improvements in underwriting and product innovation.
And let’s face it: issuing new, innovative products with competitive pricing keep the insurer in the game.
Under our current market dynamics, staying in the game by growing top-line sales is critical, but so is bolstering bottom-line profitability. Here, the insurer should evaluate its capital management practices, as well as existing underwriting and distribution functions. For example, digitization of underwriting empowers insurers to increase outreach and embrace virtual audiences with online tools that are easy to use. Policy services supporting rating and underwriting further streamline the process, freeing underwriters to focus on processing more business.
Insurers still concerned about maintaining profitability during a planned growth phase may want to evaluate their goals against the power of leveraging digital technologies and outsourcing nonstrategic processes—key ingredients for success.