Greater compliance management requirements, tighter regulatory environment and a more demanding customer are forcing insurers to take a second look at what business models they have in place in order to improve their performance and provide a better overall product and service, according to a new report from tax and advisory company PricewaterhouseCoopers.
As its title suggests – “Top Issues: The Insurance Industry in 2014,” PwC’s latest analysis examines what core function and systems insurers are examining to match or surpass their customers’ needs, while at the same time making sure that they mesh what firms want to accomplish from a standpoint of goals.
Jamie Yoder, insurance advisory practice leader at PwC, indicated that the industry is in an almost constant state of flux, so executives have to constantly be refining their strategies.
“[We’re] in a truly transformative period,” said Yoder. “Insurers can adapt and thrive, especially if they effectively utilize emerging technologies to improve their operations and better serve customers.”
Modernization key to maintaining competitiveness
The report details three ways in which insurers may be able to capitalize on opportunities as they arise – through operational modernization, being relevant to consumers and by taking advantage of circumstances in which they can modify their core systems, such as through claim submissions, policy issuance and billing.
“Core systems transformations are sophisticated processes, but if done strategically, they have the potential to draw new value points back to insurance organizations,” said Imran Ilyas, principal insurance advisory practice leader at PwC. “Customer interactions have become the Holy Grail for high retention rates. Utilizing a technology solution that creates a consistent customer experience across the enterprise and arming agents with the most vital information should be an overarching goal for insurers in 2014.”
Another key aspect that insurers should try to focus on is improving data governance by optimizing data analytics, accomplishing underwriting goals on data migration and consolidating claim forms so that they don’t have to take up so much space when indexing data.
Less than a third of the way into 2014, insurers have faced a different backdrop in terms of regulatory strictures, but the industry has pushed back. The Property Casualty Insurers Association of America was one of several trade associations that’s advocated amending the Dodd-Frank Act so the Federal Reserve doesn’t impose bank-like capital standards on their industry.