More priority investments listed in the report were portal functionality to provide self-service capabilities both to agents and policyholders, policy administrations system replacements and document management upgrades.
Competitive advantage isn’t the only reason workers’ comp insurers are finally investing in policy admin systems; the same regulatory forces that have contributed to a struggling market are also increasing demands on policy admin systems. Gathering and reporting transactional level data, incorporating more business rules and predictive models, and automating underwriting decisions are top priorities for policy admin purchases in this sector.
Agent portals are also listed as a key area since agents handle so much of the distribution; carriers should be looking for user-friendly functionality and access to loss run reporting and analysis, according to the report.
Overall, however, business intelligence—predictive analytics in particular—is garnering the most attention in the sector, which has tightened since 2006, leaving insurers to seek out all possible underwriting advantages, according to Novarica.
The combined ratio for the sector has held consistently high, improving to 116 percent this year after reaching 116.6 percent in 2010 and 117.1 percent in 2011.
The report segmented the 110 large and midsize U.S. insurers active in the workers’ comp space. Eight carriers were classified as “very large,” having more than $5 billion in total premium across all lines—e.g. AIG, Liberty Mutual, The Hartford, ACE, W.R. Berkley. Novarica classified 14 large insurers (e.g. SCIF, Old Republic General, State Insurance Fund of New York) and 88 midsize.
This story originally appeared at Insurance Networking News.
Justin Stephani is assistant editor at Insurance Networking News.