Increasing customer satisfaction, promoting growth and reducing costs top the challenges insurance executives face today, according to a new study from Genpact Limited, a global business process outsourcing and information technology services company. These challenges are juxtaposed against the market uncertainties of the last few years and varying levels of maturity and preparedness across companies, according to Genpact.
Conducted in 2014, the research project—aimed at assessing the potential for new operating models across a spectrum of industry sectors—is based on a survey of 920 senior executives and detailed insights from 95 senior executives in the P&C insurance industry working in predominantly large companies with more than 10,000 employees in North America. The report based on the research, “Transforming insurance operations through advanced operating models,” examines the trends to better understand how enterprises are driving transformation to achieve business impact.
The single most commonly-cited challenge for insurance executives was increasing customer satisfaction, with 60 percent of respondents listing it in their top three, according to the report. Growth and scalability and cutting costs round out the top three critical concerns cited, with risk and regulations just behind. According to Genpact, the executives are far less concerned about agility, innovation, or reduction of capital and asset intensity. When addressing these challenges, certain functions were perceived to have greater impact across a range of challenges, such as actuarial and claims analysis. On the other hand, other functions such as P&C agency support were reported to have a more focused impact on single challenges like impacting growth, the study found.
Specifically, about 84 percent of operations executives said that commercial claims can have material impact on customer satisfaction, and 71 percent said the same for personal claims. Regarding growth and scalability, the biggest proportions of operations executives pointed to P&C agency support (79 percent) and commercial underwriting (75 percent), as well as actuarial and claims analysis as offering high impact potential.
"Pursuing scalable growth is something that has been critical to P&C insurers for a number of years, but the potential to improve customer satisfaction through advanced operating models is clearly a contemporary focus," said Scott McConnell, senior VP, Global Insurance and North America Banking Sales, Genpact. "By taking a unified approach to technology, business process reengineering, and shared organizational models, insurers are setting themselves up to more effectively address these challenges."
A little more than 60 percent of insurance operations executives said the improved use of technology can have a material impact on P&C commercial underwriting. That same percentage also believes that technology materially impacts P&C agency support. Roughly two-thirds of respondents said advanced organizational structures such as shared services and business process outsourcing (BPO) will have a material impact on actuarial and claims analysis, as well as both personal and commercial claims functions.
According to the study’s findings, the majority of respondents believe that new operating levers—such as the radically improved use of technology, business process reengineering, and advanced organizational structures—together can have on average more than a $450 million impact per firm on an annual basis.
Originally published by Insurance Networking News.
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