Modernizing insurance operations is top priority for nearly 90 percent of carriers recently surveyed but less than half have a fully developed strategy in place to make it happen.
The survey of 298 insurance executives involved in a wide range of functions—including C-suite executives, IT, underwriting, pricing and analytics—was published by technology company Earnix last month, and conducted on behalf of Earnix by Market Strategy Group. According to the survey report, “Modernizing Insurance Operations,” only 44 percent said that a “fully developed strategy currently exists” to achieve their goals related to operations modernization, while another 44 percent said “steps are currently being taken to develop a strategy.”
Just 12 percent reported that their companies have fully executed an operations modernization strategy.
Still, 87 percent of respondents said operations modernization is a top-five organizational priority for the next two years, with 23 percent ranking it as a top-two priority. Expressed differently, on a scale of 1-to-10, carrier executives surveyed gave an average rank of 8.0 to their need for modernizing operations within the next two years. According to the report, insurers are specifically focused on three key goals in their modernization efforts: personalizing products, increasing profitability, automating workflows (eliminating manual processes).
For carriers that started to modernize operations, the survey gauged progress another way, asking executives “If your insurance operations modernization plan is a 10-chapter book, what part of the book are you in right now?” The middle of the book, chapters 5 and 6, were the most popular responses, selected by 38 percent, with another third selecting chapters 7 and 8.
None reported being in chapter 10.
Asked what processes needed the most attention in terms of modernization, 94 percent said rating, 90 percent said product personalization and 85 percent listed pricing analytics as a top priority.
Legacy systems are holding insurers back, the report says, noting that 28 percent said they are preventing carriers from being flexible in personalizing pricing. Another 25 percent said they can’t find employees experienced in using and maintaining their legacy systems.
Asked how long it would take to move a significant underwriting change into production, more than half said it would take five months or longer.
In other survey questions, Earnix sought descriptions of how carriers define success in terms of operations modernization and their takes on industry trends and macroeconomic factors weighing on them as they consider modernizing operations technology.
Survey responses throughout the report are presented separately for North American companies and those in Europe and Australia, and for two size groups (over and under 20,000 employees). There is no breakdown between property/casualty and life respondents.
Earnix describes itself as a provider of mission-critical composable and cloud-based intelligent solutions.
Technology offerings from Earnix include a real-time AI-driven enterprise rating engine with analytical underwriting, dynamic pricing, and telematics.