Novarica Expects IoT Will Begin to Impact Specialty Lines Carriers
Staff Writer | April 02, 2015
The specialty lines insurance marketplace continues to be extremely competitive and requires a significant amount of operational flexibility to meet the needs of the insurer and the insured. A new Novarica report highlights how specialty lines insurers are turning to technology to help them attract, retain and profitably serve clients.
Novarica’s Business & Technology Trends: Specialty Lines report provides an overview of business and technology issues, data about the marketplace, and 50 examples of recent technology investments by specialty insurers. Some key findings from this report include:
Carriers are pursuing long-term data strategies. They are starting with data quality initiatives and focusing on implementing data warehouses, operational data stores, and appropriate data marts. Carriers are prioritizing reporting tools to allow the business to run ad hoc reports and obtain insights. Predictive modeling has emerged as a key driver to better claims and underwriting outcomes.
Improved underwriting and product development flexibility are key considerations. Carriers are continuing to upgrade to highly configurable policy administration systems to improve underwriting and enable product development flexibility to speed entry to profitable niches. Preferred solutions allow the definition of a variety of data elements with product configurators, simple rules and tools for launching new rating algorithms, and the ability for the business to make their own modifications.
Specialty carriers are extending functionality to agents and policyholders in their agent and customer portal initiatives in order to drive revenue by improving ease of doing business and to generate operational efficiencies. Real-time capabilities such as policy inquiry, billing inquiry, and claim inquiry are typical features. Specialty agents would like faster risk acceptance decisions.
New technologies such as IoT will begin to impact specialty lines carriers.
“Across the industry, insurers continue to make investments across the Novarica core systems map to drive growth and improve operational efficiencies,” says Mitch Wein, vice president of research and consulting for Novarica. “In many lines of business, rates will continue to decrease, putting even more pressure on insurers find efficiencies. Our research has concluded that insurers are looking to business intelligence, policy administration systems replacement, billing systems replacement and rating engines to increase output and boost revenues.”
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