A new year has arrived – and with it the opportunity for a fresh start. As such, the beginning of 2010 may see organizations looking within to evaluate internal processes and identify areas for improvement.
For the insurance industry, there are six issues on the horizon that are most likely to be of impact. In a recent article, Insurance Networking News outlines the six issues that will take prominence across the insurance companies in the United States, according to an annual Insurance Industry Outlook produced by Deloitte. Below, we list the six points along with our thoughts on how the right technology can address each concern.
1. Regulation. Tougher regulations are sure to arise after the introduction of the new National Supervisor for Insurance Commission. Companies should have in place flexible processes and technology to accommodate these changes. Technology systems with Service Oriented Architecture (SOA), which can connect existing systems with regulatory ancillaries such as NIPR, will be of advantage in complying with industry standards.
2. Expansion. According to another Deloitte newsletter, insurance companies have been “adversely affected over the past few years by slower growth rates, lower investment returns, and extreme pricing pressure.” Growth will remain difficult in 2010, so differentiation will be paramount to gaining market share. Incentive compensation management can help insurers implement compelling incentives to help drive growth.
3. Customers. Carriers need to focus on their distribution channels and partner with their producers to better understand the customer. Customer relationship management (CRM) solutions and online producer portals make it easy for producers to manage customer interaction and keep the carrier updated.
4. Streamlining. Expense reduction will remain a top priority for insurers in 2010. However, Deloitte cautions that “while rapid staff reductions, hiring freezes, salary cuts and project postponement can generate short-term savings, they normally provide little in the way of long-term benefits”. Instead, insurance companies should focus on investing in technology that can generate rapid ROI and provide year over year cost savings.
5. Technology. Deloitte points out that technology will be of the utmost importance to addressing the other concerns, whether to increase efficiencies or to expand via social media.
6. Talent. The INN article states that “managing talent through the downturn, both in terms of attracting talent on the street and retaining current employees, will be key to maintaining a long-term competitive advantage.” Securing producer loyalty is made markedly easier with the use of technology that makes it easy for producers to do business with a carrier.